How Changing Investment Climate Impacts on the Foreign Investors Investment Decision: Evidence from FDI in Germany
AbstractIn the paper we have analysed how the changing investment climate influences investment decisions of German investors. The basic idea of our concept is a treatment of investment climate conditions as a number of factors which negatively contribute to the foreign investors’ decisions. Using statistics on FDI and aggregate indicators describing the institutional (level of corruption, protection of property rights) and macro-economical (foreign exchange rates and consumer prices dynamics) environment for the period from 1998 to 2005 we have examined the impact of the investment climate conditions on FDI inflows from Germany to the countries of BRIC, G8 and some members of EU. By controlling for FDI in BRIC countries we have shown that these states represent less attractive investment destinations for German FDI despite being viewed as the future’s most promising economies. German investors still prefer exporting rather than investing in BRIC emerging markets.
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 InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 8777.
Date of creation: 15 May 2008
Date of revision:
Investment Climate; FDI; BRIC; G8;
Find related papers by JEL classification:
- D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
- F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-05-24 (All new papers)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Leahy, Dermot & Montagna, Catia, 1999. "Unionisation and Foreign Direct Investment," CEPR Discussion Papers 2260, C.E.P.R. Discussion Papers.
- Robert E. Hall & Charles I. Jones, 1999.
"Why Do Some Countries Produce So Much More Output Per Worker Than Others?,"
The Quarterly Journal of Economics,
MIT Press, vol. 114(1), pages 83-116, February.
- Robert E. Hall & Charles I. Jones, 1999. "Why Do Some Countries Produce So Much More Output per Worker than Others?," NBER Working Papers 6564, National Bureau of Economic Research, Inc.
- Haaland, Jan Ingvald Meidell & Wooton, Ian, 2001.
"Multinational firms: Easy come, easy go?,"
Center for European, Governance and Economic Development Research Discussion Papers
11, University of Goettingen, Department of Economics.
- Hakkala, Katariina & Norbäck, Pehr-Johan & Svaleryd, Helena, 2005.
"Asymmetric Effects of Corruption on FDI: Evidence from Swedish Multinational Firms,"
Working Paper Series
641, Research Institute of Industrial Economics, revised 20 Aug 2007.
- Katariina Nilsson Hakkala & Pehr-Johan Norbäck & Helena Svaleryd, 2008. "Asymmetric Effects of Corruption on FDI: Evidence from Swedish Multinational Firms," The Review of Economics and Statistics, MIT Press, vol. 90(4), pages 627-642, November.
- Kotov, Denis, 2009. "How Decisions on Investing in Russia are made by German Firms?," MPRA Paper 16373, University Library of Munich, Germany.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ekkehart Schlicht).
If references are entirely missing, you can add them using this form.