The influence of human rights indicators on foreign direct investment Online publication date: Mon, 06-Sep-2021
by Irene Goll; Abhijit Roy
International Journal of Business and Globalisation (IJBG), Vol. 29, No. 1, 2021
Abstract: This study examines the relationship between a country's respect for human rights and the foreign direct investment (FDI) it attracts. It addresses the questions of whether a nation's respect for human development, progress and freedom are a determinant of investment in the global economy. The study uses cross-sectional data from public sources including the World Bank and UNCTAD for 117 countries. Hierarchical regressions were used to analyse the data. Countries with greater institutional advancement (i.e., those that encouraged voice/accountability and those that contributed to political stability and the lack of violence), as well as those with greater economic (lesser corruption and greater labour freedom) and non-economic human development outcomes (such as opportunities for human rights) were shown to attract greater FDI. Furthermore, countries with greater global competitiveness also attract more FDI for those that are innovation and efficiency driven, but not for those that are factor driven. The managerial and public policy implications are also provided.
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