DOI: 10.15678/EBER.201X.0X0XXX	
201X, Vol. X, No. X		

The Determinants of Internationalisation 
– A Panel Gravity Model Approach

John Smith, Diana Evans

A B S T R A C T	
Objective: The objective of this paper is to evaluate determinants of the general FDI flow to Visegrad countries and the effect of participation in EMU and EU. The objective of this paper is to evaluate determinants of the general FDI flow to Visegrad countries and the effect of participation in EMU and EU.	
Research Design & Methods: It was decided to investigate how augmented gravity model of trade allows identifying and evaluating the significance of pull and push factors of FDI. In an empirical analysis of panel data Hausman-Taylor estimator was used because of the time-invariant variables presence. 	
Findings: While investment decisions regarding the choice of country are determined by the size of the target market, the distance is still a negative factor in creation of FDI volume. Additionally ……. 	
Implications & Recommendations: It is necessary to develop an “FDI attracting mechanism” using existing resources. Business regulations and taxation policy as well as main macroeconomic variables which are responsible for the economy standing are also examined as attracting the FDI flow.	
Contribution & Value Added: The originality of this work lies in studying some aspects of FDI inflow into the group of both similar and different countries in economic… The originality of this work lies in studying some aspects of FDI inflow into the group of both similar and different countries in economic…	
Article type:	research paper	
Keywords:	Internationalisation; Visegrad countries (V4); FDI; gravity theory; panel; 	
JEL codes: 	C33, F21	
Received: 11 February 2014	Revised: 18 March 2014	Accepted: 16 June 2014	

Suggested citation: 
Smith, J., & Evans, D. (2013). The Determinants of Internationalisation – A Panel Gravity Model Approach. Entrepreneurial Business and Economics Review, X(X), XX-XX, DOI: http://dx.doi.org/ 10.15678/EBER.201X.0X0XXX.
[Please remember that the above items must not exceed the first page!]

INTRODUCTION
First paragraph. Main text Calibri 10pt text text text text text text text text text text text text text text text text text text text text text text text text text text text text text text text text text text text text text text text text text text text text text text text text text text (Smith, 1976, p. 22).
Second and next paragraphs. Main text Calibri 10pt text text text text text text text text text text text text text text text text text text (Smith, 1976, p. 22) text text text text text text text text text text text text text text text text text text.
Please, do not forget to include the objective of the paper and the research methods in the introduction. 

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Literature review [MAIN HEADINGs]
International Entry Modes [Sub-Headings]
First paragraph. Main text Calibri 10pt text text text text text text text text text text text text text text text text text text text text text text text text text text text text text text text text text text text text text text text text text text text text text text text (Table 1).
Second and next paragraphs. Main text Calibri 10pt text text text text text text text text text text text text text text text text text (Figure 1).

Table 1. List of indicators used in the analysis [Calibri 9pt, bold]
Components of the intellectual capital	Indicator	Source 
(the code of dataset)	
Human capital assets
[Calibri 9pt]	HCA_1: Percent of persons with upper secondary or tertiary education attainment (%) aged 25 to 64	Eurostat (edat_lfse_08)	
	HCA_3: Percent of persons participated in education and training aged 25 to 64	Eurostat (trng_lfse_01)	
	HCA_4: Researchers as percentage of total employment	Eurostat (rd_p_perslf)*	
	HCA_5: Employment rate (15 to 64 years)	Eurostat (lfsi_emp_a)	
	HCA_6: Employment in knowledge-intensive activities as percentage of total employment	Eurostat
(htec_kia_emp and htec_kia_emp2)	
Relational capital assets	RCA_3: Foreign students as percentage of all students	Eurostat
(hrst_fl_tefor)*	
	RCA_4: International outgoing calls (1000 minutes)	Eurostat (isoc_tc_cal)*	
	RCA_5: Number of arrivals of non-residents at tourist accommodation establishments	Eurostat
(tour_occ_arnat)*	
* missing data were eliminated by imputation, in the case of shorter time series were used to extrapolate the trend, taking into account the method giving the lowest ex-post error evaluation
Source: own elaboration based on (Andriessen & Stam, 2005). [Calibri 8pt, left]

Figure 1. Export in high-tech sector from V4 countries to EU countries and EU-28 average 
in 2007-2012 period in million EUR [Calibri 9pt, bold, centered]
Source: Eurostat. (htec_trd_tot4). [Calibri 8pt, centered]

MATERIAL AND METHODS

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Second and next paragraphs. Main text Calibri 10pt text text text text text text text text text text text text text text text text text.
According to the procedure Hausman-Taylor variables included in the vector X are split into two parts according to the criterion of variation in time. On this basis, the provision of the model is as follows (1):

	(1)	

where :
β0 - is the intercept, 
β’ - is the vector of structural parameters, 
αi - is the result of individual i-unit, 
νt - effect of periodic t-period,
uit - the assumption of random error component.

RESULTS AND DISCUSSION

First paragraph. Main text Calibri 10pt text text text text text text text text text text text text text text text text text text text text text text text text text text text text text text text text text text text text text text text text text text text text text text text (Table 2 and Table 3).

Table 2. The list of estimated models
Variable / Measure	Pooled 
one way individual	One way individual within	One way time within	Two ways within	One way individual random effects	HT	
const.	-45.86***	-	-	-	-31.540***	-16.4*	
ln GDPit	4.53 ***	-0.21	4.47***	1.26	1.78*	2.26**	
ln GDPjt	0.58	2.75***	-0.46	3.46***	2.13***	1.12**	
EMUijt	-	-	-	-	-	0.59**	
magrowthjt	-	-	-	-	-	-6.01*	
ln DISTij	-	-	-	-	-	-1.63**	
seai	-	-	-	-	-	3.12***	
R2	0.19446	0.19402	0.17379	0.041463	0.1815	80,23	
F statistics	1012.7 p< 
2.22e-16	71  p < 
2.22e-16	67.3 p < 
2.22e-16	12.6 p <
4.54e-06	72.1 p < 
2.22e-16	316,6 p < 
2.22e-16	
Significant codes:  0 ‘***’ 0.001 ‘**’ 0.01 ‘*’ 0.05 ‘.’ 0.1 ‘ ’ 1
seaj - binary variable 1- country has got access to sea, 0 – others,
EMUijt - each pair countries (partner and host) are in EMU in t- year -1, 0 others,
magrowthjt - average growth expressed by 3-year moving average of GDP per capita PPS yearly logarithmic rate.
Source: own calculations in R-studio.

Table 3. Mutual trade between Ukraine (UA) and Slovakia in the years 2008–2013
Year	2008	2009	2010	2011	2012	1.-11. 2013	
Export to UA 
(in m EUR)	504.7 	252.3 	368.9 	472.0 	442.1 	439.5 	
Import from UA 
(in m EUR)	665.9 	291.8 	446.7 	607.8 	593.3 	577.9 	
Turnover 
(in m EUR)	1 170.6 	544.0 	815.6 	1 079.8 	1 035.4 	1 017.4 	
Balance 
(in m EUR)	+161.2 	+39.5 	-77.8 	-135.8 	-151.2 	-138.4 	
Source: own calculations based on data from the Statistical Office of the SR 2013 and MZV 2013.

Second and next paragraphs. Main text Calibri 10pt text text text text text text text text text text text text text text text text text.
The overall formula of the static model, which we will consider is (2):

	(1)	

where :
β0 - is the intercept, 
β’ - is the vector of structural parameters, 
αi - is the result of individual i-unit, 
νt - effect of periodic t-period,
uit - the assumption of random error component.

CONCLUSIONS

First paragraph. Main text Calibri 10pt text text text text text text text text text text text text text text text text text text text text text text text text text text text text text text text text text text text text text text text text text text text text text text text (Smith 1976, p. 22).
Second and next paragraphs. Main text Calibri 10pt text text text text text text text text text text text text text text text text text (Smith 1976, p. 22) text text text text text text text text text text text text text text text text text text text text text text text text text text text text text text text text text text text text text.

REFERENCES [Calibri 9pt, bold]

Gibbs, J. T., & Huang, L. N. (Eds.). (2001). Children of color: Psychological interventions with culturally diverse youth. San Francisco, CA: Jossey-Bass. [Calibri 9pt]
Kidder, T. (1981). The soul of a new machine. Boston, MA: Little, Brown & Company.
Ku, G. (2008). Learning to de-escalate: The effects of regret in escalation of commitment. Organizational Behavior and Human Decision Processes, 105(2), 221-232.
Labajo, J. (2003). Body and voice: The construction of gender in flamenco. In T. Magrini (Ed.), Music and gender: perspectives from the Mediterranean (pp. 67-86). Chicago, IL: University of Chicago Press.
National Renewable Energy Laboratory. (2008). Biofuels. Retrieved on May 6, 2013, from http://www.nrel.gov/learning/re_biofuels.html
Sanchez, D., & King-Toler, E. (2007). Addressing disparities consultation and outreach strategies for university settings. Consulting Psychology Journal: Practice and Research, 59(4), 286-295.

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Author(s) [Calibri 9pt, bold]	
	
[For co-authored articles, provide with the detailed contribution of co-authors]
OPTIONALLY: The contribution of co-authors is equal and can be expressed as 50% each of the authors: J. Smith prepared the literature review, while D. Evans prepared the statistical calculations.   	
	
John Smith [Calibri 9pt, bold]	
Bachelor of Business Administration (University of Castilla La Mancha, Spain); Master in Strategy of the company (University of Valencia, Spain); PhD student in Strategy and Marketing of the Company (University of Castilla La Mancha, Spain) [Calibri 9pt]	
	
Diana Evans	
Professor of University in the Area of the Business Administration in the Faculty of Economics and Business of the University of Castilla-La Mancha (Spain). PhD in Economics and Business by the University of Castilla-La Mancha (Spain); Degree in Economics and Business with Extraordinary Prize of Degree, by the University of Murcia (Spain)	
	
Correspondence to:	
Prof. John Smith, PhD
University of Castilla La Mancha
Facultad de Económicas, 
Plaza de la Universidad 1, 02071 Albacete, Spain
smith@gmail.com	
	
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The authors would like to express their gratitude to prof. Adam Ginger for his valuable comments of the draft version of this paper and his inspiration to further research study. 

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Published by the Centre for Strategic and International Entrepreneurship – Krakow, Poland