FDI from the south: The role of institutional distance and natural resources
AbstractUsing a novel dataset of bilateral FDI flows, we analyze location choices of investors from emerging economies, with an emphasis on institutions and natural resources. We show that FDI from the South has a more regional aspect than investment from the North. Institutional distance has an asymmetric effect on FDI depending on whether investors choose countries with better or worse institutions. In the latter case, large institutional distance discourages FDI inflows, but this deterring effect is diminished for destination countries with substantial resources. We also find a complementary relationship between capital flows from the North and the South in developing recipient countries, which we attribute to different FDI patterns of these investors.
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Bibliographic InfoArticle provided by Elsevier in its journal European Journal of Political Economy.
Volume (Year): 29 (2013)
Issue (Month): C ()
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Web page: http://www.elsevier.com/locate/inca/505544
Foreign direct investment; South–South; Emerging economies; Institutions; Crowding-in; Natural resources;
Other versions of this item:
- Mariya Aleksynska & Olena Havrylchyk, 2011. "FDI from the South: the Role of Institutional Distance and Natural Resources," Working Papers 2011-05, CEPII research center.
- F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
- F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
- E02 - Macroeconomics and Monetary Economics - - General - - - Institutions and the Macroeconomy
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