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Informal Institutions and Foreign Direct Investment

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  • Belay Seyoum
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    Abstract

    Foreign direct investment (FDI) inflows cannot solely be determined by conventional variables such as availability of natural resources, high skilled manpower or modern infrastructure. Important explanations also include the crucial role of institutions in attracting investment flows. This study explores the role of informal institutions in investment flows as well as the relationship between formal and informal institutions in the context of FDI flows. The term "informal institutions" has been used to describe a diverse set of practices such as corruption or culture thus leading to a serious conceptual ambiguity. This study attempts to provide a more precise and analytically useful definition. It builds on the Helmke and Levitsky typology of informal institutions.

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    Bibliographic Info

    Article provided by M.E. Sharpe, Inc. in its journal Journal of Economic Issues.

    Volume (Year): 45 (2011)
    Issue (Month): 4 (December)
    Pages: 917-940

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    Handle: RePEc:mes:jeciss:v:45:y:2011:i:4:p:917-940

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    Web page: http://www.mesharpe.com/mall/results1.asp?acr=jei

    Related research

    Keywords: informal institutions; formal institutions; foreign direct investment; inward FDI flows;

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