This file is part of IDEAS, which uses RePEc data


[ Papers | Articles | Software | Books | Chapters | Authors | Institutions | JEL Classification | NEP reports | Search | New papers by email | Author registration | Rankings | Volunteers | FAQ | Blog | Help! ]

Some new evidence on determinants of foreign direct investment in developing countries

Author info | Abstract | Publisher info | Download info | Related research | Statistics
Author Info
Singh, Harinder
Kwang W. Jun
Abstract

The authors of this paper expand on earlier studies of the determinants of foreign direct investment (FDI) by empirically analyzing various factors - including political risk, business conditions, and macroeconomic variables - that influence direct investment flows to developing countries. They try to fill a gap in the literature by examining qualitative factors. Using a pooled model of developing countries, they test three groups of hypotheses on what influences direct investment. Tests of the first hypothesis indicate that a qualitative index of political risk is a significant determinant of FDI flows for countries that have historically attracted high FDI flows. For countries that have not attracted such flows, sociopolitical instability has a negative impact on investment flows. Tests of the second hypothesis show that a general qualitative index of business operation conditions is an important determinant of FDI in countries that receive high flows. This country group also shows a positive relationship between taxes on international transactions and FDI flows. Results from tests of the third hypothesis reveal that exports generally, especially manufacturing exports, are significant determinant of FDI flows for countries in which FDI is high. Finally, export orientation is the strongest variable for explaining why a country attracts FDI. This finding is in line with the secular trend toward increasing complementarity between trade and FDI.

Download Info
To download:

If you experience problems downloading a file, check if you have the proper application to view it first. Information about this may be contained in the File-Format links below. 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.

File URL: http://www-wds.worldbank.org/servlet/WDSContentServer/WDSP/IB/1995/11/01/000009265_3961019154739/Rendered/PDF/multi0page.pdf
File Format: application/pdf
File Function:
Download Restriction: no

Publisher Info
Paper provided by The World Bank in its series Policy Research Working Paper Series with number 1531.

Download reference. The following formats are available: HTML (with abstract), plain text (with abstract), BibTeX, RIS (EndNote, RefMan, ProCite), ReDIF
Length:
Date of creation: 30 Nov 1995
Date of revision:
Handle: RePEc:wbk:wbrwps:1531

Contact details of provider:
Postal: 1818 H Street, N.W., Washington, DC 20433
Email:
Web page: http://www.worldbank.org/
More information through EDIRC

For technical questions regarding this item, or to correct its listing, contact: (Roula I. Yazigi).

Related research
Keywords: Labor Policies; Economic Theory&Research; Environmental Economics&Policies; Statistical&Mathematical Sciences; International Terrorism&Counterterrorism; Environmental Economics&Policies; Inequality; Statistical&Mathematical Sciences; Foreign Direct Investment; Economic Theory&Research;

Other versions of this item:

Cited by:
(explanations, 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.)
  1. Subhasis Bera, 2009. "South-South FDI vs North-South FDI: A Comparative Analysis in the Context of India," Working Papers id:2143, esocialsciences.com. [Downloadable!]
  2. Anthony Bende-Nabende, 2002. "Foreign direct investment determinants in Sub-Sahara Africa: A co-integration analysis," Economics Bulletin, Economics Bulletin, vol. 6(4), pages 1-19. [Downloadable!]
  3. Amitendu Palit & Shounkie Nawani, 2007. "Technological Capability as a Determinant of FDI Inflows: Evidence from Developing Asia & India," Indian Council for Research on International Economic Relations, New Delhi Working Papers 193, Indian Council for Research on International Economic Relations, New Delhi, India. [Downloadable!]
  4. Ewe-Ghee Lim, 2001. "Determinants of, and the Relation Between, Foreign Direct Investment and Growth: A Summary of the Recent Literature," IMF Working Papers 01/175, International Monetary Fund. [Downloadable!]
  5. M. Uður Karakaplan & Bilin Neyaptý & Selin Sayek, 2005. "Aid and Foreign Direct Investment : International Evidence," Departmental Working Papers 0505, Bilkent University, Department of Economics. [Downloadable!]
    Other versions:
  6. Alicia Garcia-Herrero & Daniel Santabarbara, 2005. "Does China have an impact on foreign direct investment to Latin America?," International Finance 0508010, EconWPA. [Downloadable!]
    Other versions:
  7. Mottaleb, Khondoker Abdul, 2007. "Determinants of Foreign Direct Investment and Its Impact on Economic Growth in Developing Countries," MPRA Paper 9457, University Library of Munich, Germany. [Downloadable!]
  8. Akinkugbe, Oluyele, 2003. "Flow of Foreign Direct Investment to Hitherto Neglected Developing Countries," Working Papers UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER). [Downloadable!]
  9. Morisset, Jacques, 2000. "Foreign direct investment in Africa : policies also matter," Policy Research Working Paper Series 2481, The World Bank. [Downloadable!]
  10. Albuquerque, Rui & Loayza, Norman & Serven, Luis, 2003. "World market integration through the lens of foreign direct investors," Policy Research Working Paper Series 3060, The World Bank. [Downloadable!]
    Other versions:
  11. Peter Nunnenkamp, 2002. "Determinants of FDI in Developing Countries: Has Globalization Changed the Rules of the Game?," Kiel Working Papers 1122, Kiel Institute for the World Economy. [Downloadable!]
  12. Brahmbhatt, Milan & Srinivasan, T.G. & Murrell, Kim, 1996. "India in the global economy," Policy Research Working Paper Series 1681, The World Bank. [Downloadable!]
  13. Florence Jaumotte, 2004. "Foreign Direct Investment and Regional Trade Agreements: The Market Size Effect Revisited," IMF Working Papers 04/206, International Monetary Fund. [Downloadable!]
  14. Deb Kusum Das & Gunajit Kalita, . "Aggregate Productivity Growth in Indian Manufacturing: An Application of Domar Aggregation," Indian Council for Research on International Economic Relations, New Delhi Working Papers 238, Indian Council for Research on International Economic Relations, New Delhi, India. [Downloadable!]
  15. Flávio Vilela Vieira & Michele Polline Veríssimo, 2005. "Crescimento Econômico De Longo Prazo Na China: Uma Investigação Econométrica," Anais do XXXIII Encontro Nacional de Economia [Proceedings of the 33th Brazilian Economics Meeting] 067, ANPEC - Associação Nacional dos Centros de Pósgraduação em Economia [Brazilian Association of Graduate Programs in Economics]. [Downloadable!]
  16. Eckhard Janeba, 2001. "Global Corporations and Local Politics: A Theory of Voter Backlash," NBER Working Papers 8254, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  17. Kitty K. Chan & Edward R. Gemayel, 2004. "Risk Instability and the Pattern of Foreign Direct Investment in the Middle East and North Africa Region," IMF Working Papers 04/139, International Monetary Fund. [Downloadable!]
Statistics
Access and download statistics

Did you know? All bibliographic data on IDEAS has been put in the public domain by the publishers.

This page was last updated on 2009-11-26.

This information is provided to you by IDEAS at the Department of Economics, College of Liberal Arts and Sciences, University of Connecticut using RePEc data on a server sponsored by the Society for Economic Dynamics.