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Emerging economies' attraction of foreign direct investment

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  • Groh, Alexander Peter
  • Wich, Matthias
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    Abstract

    This paper uses a composite measure to examine why some countries attract more foreign direct investment (FDI) than others. The measure considers all identified, measurable, and comparable socioeconomic aspects that affect FDI decisions on an aggregated country level. As a result, we can rank 127 countries with respect to their FDI attraction. The measure allows detailed strength and weakness analyses and enhances the discussion of why FDI flows are concentrated in advanced economies. Additionally, the findings reveal the areas in which emerging countries should improve in order to narrow existing gaps. Our robustness checks indicate that the composite measure accurately tracks real FDI activity.

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    File URL: http://www.sciencedirect.com/science/article/pii/S1566014112000167
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    Bibliographic Info

    Article provided by Elsevier in its journal Emerging Markets Review.

    Volume (Year): 13 (2012)
    Issue (Month): 2 ()
    Pages: 210-229

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    Handle: RePEc:eee:ememar:v:13:y:2012:i:2:p:210-229

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    Web page: http://www.elsevier.com/locate/inca/620356

    Related research

    Keywords: FDI; Economic comparison; Emerging markets; Composite measure;

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