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The Effects of Legal System and Deregulation on FDI (in Persian)

Author

Listed:
  • Mazyaki, Ali

    (Assistant Professor of Economics, Faculty of Economics, Allameh Tabataba’i University, Tehran, Iran.)

  • Moradi, Ehsan

    (M.A. in Socio-Economic System Engineering, Institute for Management and Planning Studies (IMPS), Tehran, Iran.)

Abstract

This study examines the effects of legal structure and deregulation on foreign direct investment (FDI). To do so, two categories of legal and economic variables have been examined. The data for the legal variables are extracted from the reports of Economic Freedom of the World, while the economic variables are collected from the database of the World Bank; also the panel covers the period 2000- 2014 for 89 countries. Economic variables in our empirical model include “net foreign direct investment per capita”, “GDP per capita”, “economic openness”, “trade balance per capita”, “growth rate of real GDP”, and “real exchange rate”; and the legal variables consist of "legal structure and respect to property rights", "domestic deregulation", and "freedom to trade internationally". Our results indicate a direct, increasing, and augmentative effect from "independent legal structure and respect for property rights" on the ratio of foreign direct investment to gross domestic product.

Suggested Citation

  • Mazyaki, Ali & Moradi, Ehsan, 2020. "The Effects of Legal System and Deregulation on FDI (in Persian)," The Journal of Planning and Budgeting (٠صلنامه برنامه ریزی Ùˆ بودجه), Institute for Management and Planning studies, vol. 25(1), pages 71-86, May.
    • Handle: RePEc:auv:jipbud:v:25:y:2020:i:1:p:71-86
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    More about this item

    Keywords

    FDI; Legal System; Property Rights; Deregulation; Free Trade.;
    All these keywords.

    JEL classification:

    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • P33 - Political Economy and Comparative Economic Systems - - Socialist Institutions and Their Transitions - - - International Trade, Finance, Investment, Relations, and Aid
    • P47 - Political Economy and Comparative Economic Systems - - Other Economic Systems - - - Performance and Prospects

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