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Revisiting the relationship between governance and foreign direct investment

  • Pierre-Guillaume Méon
  • Khalid Sekkat

Using a sample of 96 countries over the nineties, this paper examines the extent to which different dimensions of governance affect FDI inflows. It considers six aspects of governance. The results of a least-squares estimation suggest a positive relationship between institutional quality and FDI. However, when the issue of the endogeneity of governance is tackled thanks to 2SLS regressions, the relationship appears much weaker.

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Paper provided by ULB -- Universite Libre de Bruxelles in its series DULBEA Working Papers with number 07-13.RS.

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Length: 27 p.
Date of creation: Oct 2007
Date of revision:
Publication status: Published by: DULBEA - Université libre de Bruxelles, Bruxelles
Handle: RePEc:dul:wpaper:07-13rs
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