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Foreign Direct Investment: Localization And Institutional Determinants

Author

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  • Nuno Carlos LEITÃO

    (Polytechnic Institute of Santarém, Complexo Andaluz Apt -295 ,2001- 904 Santarém , Portugal)

Abstract

This article examines the foreign direct investment (FDI) in Portugal, i.e why foreign companies are located in Portugal. The compression of the determinants of FDI is important to take decisions on economic policy. The determinants of the location were used as market size, labour cost, taxes and economic stability. Beyond these were introduced two institutional variables the impact of globalization and corruption on FDI. The study applies a panel data approach (Fixed Effects and GMM system estimator). The results show that the market size and globalization has a positive impact on FDI. The corruption has a negative impact on investor decisions. Wages, inflation and taxes are also statistically significant.

Suggested Citation

  • Nuno Carlos LEITÃO, 2011. "Foreign Direct Investment: Localization And Institutional Determinants," Management Research and Practice, Research Centre in Public Administration and Public Services, Bucharest, Romania, vol. 3(2), pages 1-6, June.
  • Handle: RePEc:rom:mrpase:v:3:y:2011:i:2:p:1-6
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    File URL: https://mrp.ase.ro/no32/f1.pdf
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    References listed on IDEAS

    as
    1. Farok J. Contractor & Susan M. Mudambi, 2008. "The influence of human capital investment on the exports of services and goods: An analysis of the top 25 services outsourcing countries," Management International Review, Springer, vol. 48(4), pages 433-445, April.
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    Cited by:

    1. Ivan Deseatnicov & Hiroya Akiba, 2013. "Reconsideration of the Effects of Political Factors on FDI: Evidence from Japanese Outward FDI," Review of Economics & Finance, Better Advances Press, Canada, vol. 3, pages 35-48, February.
    2. Razvan Catalin DOBREA & Elena Iuliana SERBAN, 2011. "The Contribution Of Foreign Direct Investments To Performance And Competitiveness Growth Of Receivers Countries," Management Research and Practice, Research Centre in Public Administration and Public Services, Bucharest, Romania, vol. 3(3), pages 42-52, September.
    3. Muhammad Shahbaz & Smile Dube & Ilhan Ozturk & Abdul Jalil, 2015. "Testing the Environmental Kuznets Curve Hypothesis in Portugal," International Journal of Energy Economics and Policy, Econjournals, vol. 5(2), pages 475-481.
    4. Nuno Carlos Leit o, 2015. "Energy Consumption and Foreign Direct Investment: A Panel Data Analysis for Portugal," International Journal of Energy Economics and Policy, Econjournals, vol. 5(1), pages 138-147.

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    More about this item

    Keywords

    Foreign Direct Investment; Panel Data; Portugal; Globalization and Corruption.;
    All these keywords.

    JEL classification:

    • D92 - Microeconomics - - Micro-Based Behavioral Economics - - - Intertemporal Firm Choice, Investment, Capacity, and Financing
    • C12 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Hypothesis Testing: General

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