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Does Contract Risk Impede Foreign Direct Investment? Author info | Abstract | Publisher info | Download info | Related research | Statistics Peter Egger
Hannes Winner
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This paper analyzes the impact of contract-related risk factors on inward foreign direct investment. We presume that risk related determinants enter directly the cost function of multinationals. For a sample of 50 developed and less developed countries and the time period 1985-1997 we find a clear negative relationship between contract risk and FDI. Further, a simulation analysis reveals that the observed change in contract risk has equalized the international distribution of inward foreign direct investment.
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Article provided by Swiss Society of Economics and Statistics (SSES) in its journal Swiss Journal of Economics and Statistics .
Volume (Year): 139 (2003)
Issue (Month): II (June)
Pages: 155-172
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Handle: RePEc:ses:arsjes:2003-ii-2Contact details of provider: Email: Web page: http://www.sjes.ch More information through EDIRC
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Keywords: Contract risk ; Corruption ; Foreign direct investment ; Panel econometrics ; Other versions of this item:
Find related papers by JEL classification: F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business R38 - Urban, Rural, and Regional Economics - - Production Analysis and Firm Location - - - Government Policies; Regulatory Policies C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data
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