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Autocracy, Democracy, and FDI Inflows to the Developing Countries

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  • Benhua Yang
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    Abstract

    This paper investigates the relationship between political regimes and Foreign Direct Investment (FDI) inflows to the developing countries for a sample of 134 countries over the 1983-2002 period. Using two categorical measures of regime type and three different measures of FDI, this study finds that, regardless of the measures of regime type, democracies are not significantly associated with either FDI in level or FDI as a ratio to GDP; democracy is positively related to a higher level of per capita FDI, but this result is not robust to alternative measures of political regime. Taken as a whole, there is no evidence of a systematic relationship between democracy and FDI inflows. This result suggests that being a democracy does not help attract higher levels of FDI.

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    File URL: http://www.tandfonline.com/doi/abs/10.1080/10168730601027179
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    Bibliographic Info

    Article provided by Taylor & Francis Journals in its journal International Economic Journal.

    Volume (Year): 21 (2007)
    Issue (Month): 3 ()
    Pages: 419-439

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    Handle: RePEc:taf:intecj:v:21:y:2007:i:3:p:419-439

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    Related research

    Keywords: Autocracy; democracy; regime; foreign direct investment; developing countries;

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    Cited by:
    1. Blanco, Luisa R., 2012. "The Spatial Interdependence of FDI in Latin America," World Development, Elsevier, vol. 40(7), pages 1337-1351.
    2. Arslan Tariq Rana & Mazen Kebewar, 2014. "The Political Economy of FDI flows into Developing Countries: Does the depth of International Trade Agreements Matter?," Working Papers halshs-00940584, HAL.

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