Openness and the International allocation of foreign direct investment
AbstractThis paper develops an ordinal index to measure the openness of FDI policy regimes for individual countries. There has been a generalised increase in the index between 1990 and 2002. The most important determinants of variations in FDI flows across countries and over time are country size, the level of educational achievement, and growth. The openness index is positively associated with FDI flows, but its explanatory power is low. Liberalising approval procedures and lifting requirements that foreign companies enter into joint ventures with domestic firms encourage FDI. We conclude that the openness of the FDI regime operates as a factor enabling FDI, but that location advantages are paramount in determining the international allocation of FDI. We also turn the question around and ask what countries are more likely to impose restrictions on FDI. We find that lower levels of education and larger domestic markets are associated with greater restrictions on FDI. In addition, there is some evidence that better institutions are associated with lower FDI restrictions.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by Taylor & Francis Journals in its journal Journal of Development Studies.
Volume (Year): 43 (2007)
Issue (Month): 7 ()
Contact details of provider:
Web page: http://www.tandfonline.com/FJDS20
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Görg, Holger & Mühlen, Henning & Nunnenkamp, Peter, 2010.
"FDI liberalization, firm heterogeneity and foreign ownership: German firm decisions in reforming India,"
Proceedings of the German Development Economics Conference, Hannover 2010
35, Verein für Socialpolitik, Research Committee Development Economics.
- Holger Gorg & Henning Muhlen & Peter Nunnenkamp, 2010. "FDI Liberalisation, Firm Heterogeneity and Foreign Ownership: German Firm Decisions in Reforming India," Journal of Development Studies, Taylor & Francis Journals, vol. 46(8), pages 1367-1384.
- Christian Milelli & Alice Sindzingre, 2013. "Chinese Outward Foreign Direct Investment in Developed and Developing Countries: Converging Characteristics?," EconomiX Working Papers 2013-34, University of Paris West - Nanterre la Défense, EconomiX.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Michael McNulty).
If references are entirely missing, you can add them using this form.