The determining factor of foreign direct investment: how significant are institutional aspects in developing countries? Online publication date: Mon, 31-Jan-2022
by Ali Lamouchi; Abdelkader Mohamed Sghaier Derbali
International Journal of Economics and Business Research (IJEBR), Vol. 23, No. 2, 2022
Abstract: Since the 1980s, the attractiveness of FDI has always been one of the growth drivers for most developing countries. The economic literature highlights the expected benefits of FDI in terms of job creation, currency inflows and spillovers. One of the questions at this level is the factors that determine the attractiveness of FDI. This paper is an empirical contribution in this topic. It covers a panel of 46 developing countries over the period from 1996 to 2018. Our empirical results show that, in addition to some classic determinants of FDI attractiveness, institutional factors, particularly those related to economic freedoms available to investors, are also of great importance. We find that economic freedoms have a significant impact on net flows of foreign direct investment. Also, we find that civil liberties, political freedoms, economic growth, and business environment have a considerable effect on net flows of FDI.
Online publication date: Mon, 31-Jan-2022
Go to Inderscience Online Journals to access the Full Text of this article.
If you are not a subscriber and you just want to read the full contents of this article, buy online access here.Complimentary Subscribers, Editors or Members of the Editorial Board of the International Journal of Economics and Business Research (IJEBR):
Login with your Inderscience username and password:
Want to subscribe?
A subscription gives you complete access to all articles in the current issue, as well as to all articles in the previous three years (where applicable). See our Orders page to subscribe.
If you still need assistance, please email firstname.lastname@example.org