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Economic Freedom and FDI in Selected Developing Countries


  • Arash Ketabforoush Badri

    (Department of Economics, Faculty of Management and Accounting, Qazvin Branch, Islamic Azad University, Iran)

  • Aidin Poorabdollahi Sheshgelani

    (Department of Management, Faculty of Management, Economics and Accounting, Tabriz branch, Islamic Azad University, Iran)


One of the factors of providing capital for investment in different economic sectors which can be very useful is foreign direct investment. For we can say that by FDI entering the host countries, in spite of providing capital, technology transfer, import of expert human capital, management and knowledge are happen too. Therefore, special attention to this fact and considering the solutions and improving policies for increasing FDI seem necessary. For achieving this, this study is trying to consider the effect of economic freedom on FDI in 10 selected developing countries in period of 2001 to 2013 using the panel data method. The results show that economic freedom has a positive and meaningful effect on FDI in the studied countries. Also the index of economic openness, gross capital formation and financial development are some of the factors that have a positive and meaningful effect on FDI attraction process in the host country.

Suggested Citation

  • Arash Ketabforoush Badri & Aidin Poorabdollahi Sheshgelani, 2017. "Economic Freedom and FDI in Selected Developing Countries," Noble International Journal of Economics and Financial Research, Noble Academic Publsiher, vol. 2(5), pages 82-87, May.
  • Handle: RePEc:nap:nijefr:2017:p:82-87

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    References listed on IDEAS

    1. Arslan, Ahmad & Tarba, Shlomo Y. & Larimo, Jorma, 2015. "FDI entry strategies and the impacts of economic freedom distance: Evidence from Nordic FDIs in transitional periphery of CIS and SEE," International Business Review, Elsevier, vol. 24(6), pages 997-1008.
    2. Faisal Faisal & Peshraw Majid Muhamad & Turgut Tursoy, 2016. "Impact of Economic Growth, Foreign Direct Investment and Financial Development on Stock Prices in China: Empirical Evidence from Time Series Analysis," International Journal of Economics and Financial Issues, Econjournals, vol. 6(4), pages 1998-2006.
    3. Leandro do Rosario Viana Duarte & Yin Kedong & Li Xuemei, 2017. "The Relationship between FDI, Economic Growth and Financial Development in Cabo Verde," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 9(5), pages 132-142, May.
    4. Herrera-Echeverri, Hernán & Haar, Jerry & Estévez-Bretón, Juan Benavides, 2014. "Foreign direct investment, institutional quality, economic freedom and entrepreneurship in emerging markets," Journal of Business Research, Elsevier, vol. 67(9), pages 1921-1932.
    5. Bekhet, Hussain Ali & Al-Smadi, Raed Walid, 2015. "Determinants of Jordanian foreign direct investment inflows: Bounds testing approach," Economic Modelling, Elsevier, vol. 46(C), pages 27-35.
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