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FDI and Natural Resource Rents: Evidence from Eight Post-Communist Countries

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  • Irandoust, Manuchehr

    (Independent Researcher, Sweden)

Abstract

This study examines the long-run relationship between foreign direct investment (FDI), trade openness, and natural resource rents in Transcaucasian and Central Asian post-communist countries. The paper deals with cross-sectional dependence, homogeneity restrictions, and panel unit root tests. The departure from earlier studies of the role of natural resources in attracting FDI is in the asymptotic theory of likelihood-based panel cointegration allowing for multiple cointegrating vectors. The results reveal that the variables cointegrate in six countries out of eight under review. This implies that natural resource rents and trade openness promote FDI. Policy implications and legal aspects are discussed.

Suggested Citation

  • Irandoust, Manuchehr, 2022. "FDI and Natural Resource Rents: Evidence from Eight Post-Communist Countries," Journal of Economic Development, The Economic Research Institute, Chung-Ang University, vol. 47(2), pages 67-79, June.
    • Handle: RePEc:ris:jecdev:0017
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    References listed on IDEAS

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    More about this item

    Keywords

    Foreign Direct Investment; Natural Resource Rents; Likelihood-Based Panel;
    All these keywords.

    JEL classification:

    • C20 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - General
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics

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