Democracy, Foreign Direct Investment and Natural Resources
AbstractExisting studies assume that the impact of democracy on FDI is the same for re- source exporting and non-resource exporting countries. This paper examines whether natural resources alter the relationship between FDI and democracy. We estimate a linear dynamic panel-data model using data from 112 developing countries over the period 1982-2007, and we .nd that there is some critical value of the share of miner- als and oil in total exports below which democracy enhances FDI, and above which democracy reduces FDI. We identify 90 countries where an expansion of democracy may enhance FDI and 22 countries where an increase in democratization may reduce FDI.
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Bibliographic InfoPaper provided by University of Kansas, Department of Economics in its series WORKING PAPERS SERIES IN THEORETICAL AND APPLIED ECONOMICS with number 201009.
Length: 39 pages
Date of creation: Dec 2010
Date of revision:
Democracy; Foreign Direct Investment; Natural Resources.;
Find related papers by JEL classification:
- F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
- D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-12-23 (All new papers)
- NEP-ENE-2010-12-23 (Energy Economics)
- NEP-POL-2010-12-23 (Positive Political Economics)
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