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Culture-specific Investment Attractiveness Index: An Original Composite Indicator

Author

Listed:
  • Sebastian Tocar

    (Doctoral School of Economics and Business Administration, Alexandru Ioan Cuza University of Iasi, Romania.)

Abstract

This paper presents an original approach to the investment attractiveness of the countries. The author developed an index of investment attractiveness which takes into account indicators of cultural specificity. The specialty literature offers a variety approaches in which different factors that are considered determinants of foreign direct investment (FDI) are analyzed. However, even if cultural are frequently mentioned (and sometimes analyzed), they rarely represent an object of the research of FDI determinants. As for the indexes of investment attractiveness identified in the literature, the situation is even more difficult, and the cultural factors seem to be avoided. The elaboration of the Culture-specific Investment Attractiveness Index through the application of the Principal Component Analysis technique proved to be efficient, the new construct being reliable. Further analysis of the connection between the Index and the volume of FDI attracted confirm its suitability for explaining the localization of FDI in Europe.

Suggested Citation

  • Sebastian Tocar, 2019. "Culture-specific Investment Attractiveness Index: An Original Composite Indicator," International Journal of Economics and Financial Issues, Econjournals, vol. 9(4), pages 203-211.
    • Handle: RePEc:eco:journ1:2019-04-24
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    References listed on IDEAS

    as
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Investment Attractiveness Index; FDI; culture;
    All these keywords.

    JEL classification:

    • C38 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Classification Methdos; Cluster Analysis; Principal Components; Factor Analysis
    • C43 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Index Numbers and Aggregation
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • Z19 - Other Special Topics - - Cultural Economics - - - Other

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