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Governance and foreign direct investment: a panel gravity model approach

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  • Sotirios Bellos
  • Turan Subasat

Abstract

This paper investigates the link between governance and foreign direct investment in the case of 14 transition countries by using a panel gravity model approach in two alternative ways. First, the level of governance in the target country is studied. Second, the absolute difference in the governance level between the source and target country is investigated. In both cases the results suggest that the lack of good governance does not deter, in fact it encourages, foreign direct investment.

Suggested Citation

  • Sotirios Bellos & Turan Subasat, 2012. "Governance and foreign direct investment: a panel gravity model approach," International Review of Applied Economics, Taylor & Francis Journals, vol. 26(3), pages 303-328, April.
    • Handle: RePEc:taf:irapec:v:26:y:2012:i:3:p:303-328
    DOI: 10.1080/02692171.2011.587110
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    References listed on IDEAS

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