IDEAS home Printed from https://ideas.repec.org/p/hal/journl/hal-04356033.html

Foreign direct investment under uncertainty evidence from a large panel of countries

Author

Listed:
  • Caroline Jardet

    (Banque de France)

  • Cristina Jude

    (LEO - Laboratoire d'Économie d'Orleans [2022-...] - UO - Université d'Orléans - UT - Université de Tours - UCA - Université Clermont Auvergne, Banque de France)

  • Menzie Chinn

    (University of Wisconsin-Madison, NBER - The National Bureau of Economic Research)

Abstract

We examine the effect of uncertainty on foreign direct investment inflows for advanced, emerging market and developing countries over a 25‐year long (pre‐Covid) sample. Using a push‐pull framework, and controlling for both global and local factors, we find policy uncertainty has discernable and significant effects on inflows, varying in strength and direction between different groups of countries. Moreover, it is not host country uncertainty that seems to matter the most, but rather global uncertainty. Additionally, we find that high levels of uncertainty matter disproportionately. Finally, financial openness accentuates the impact of uncertainty for emerging market and developing countries.

Suggested Citation

  • Caroline Jardet & Cristina Jude & Menzie Chinn, 2023. "Foreign direct investment under uncertainty evidence from a large panel of countries," Post-Print hal-04356033, HAL.
    • Handle: RePEc:hal:journl:hal-04356033
    DOI: 10.1111/roie.12646
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a
    for a similarly titled item that would be available.

    Other versions of this item:

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Leone, Fabrizio, 2021. "Foreign Ownership and Robot Adoption," CEPREMAP Working Papers (Docweb) 2111, CEPREMAP.
    2. Jaewon Jung, 2023. "Multinational Firms and Economic Integration: The Role of Global Uncertainty," Sustainability, MDPI, vol. 15(3), pages 1-18, February.
    3. Bermpei, Theodora & Ferrara, Laurent & Karadimitropoulou, Aikaterini & Triantafyllou, Athanasios, 2024. "Commodity currencies revisited: The role of global commodity price uncertainty," Journal of International Money and Finance, Elsevier, vol. 145(C).
    4. Kaffo Fotio, Hervé & Karim, Abdoul, 2024. "Unravelling the impact of political risk on industrialization: Evidence from Africa," International Economics, Elsevier, vol. 179(C).
    5. Konstantinos Lagos & Yuan Wang, . "The threshold effects of global economic uncertainty on foreign direct investment," UNCTAD Transnational Corporations Journal, United Nations Conference on Trade and Development.
    6. Ketan REDDY & Subash SASIDHARAN & Shandre Mugan THANGAVELU, 2024. "Does Economic Policy Uncertainty Impact Firm GVC Participation? Microdata Evidence from India," Working Papers DP-2024-23, Economic Research Institute for ASEAN and East Asia (ERIA).
    7. Khotamov, Navruz & Jinji, Naoto, 2025. "Correlation aversion in foreign direct investment," Finance Research Letters, Elsevier, vol. 74(C).
    8. Fabrizio Leone, 2023. "Multinationals, robots and the labor share," CEP Discussion Papers dp1900, Centre for Economic Performance, LSE.
    9. Tabash, Mosab I., 2025. "Economic policy uncertainty and foreign direct investment inflow: The role of institutional quality in South Asia region," Research in International Business and Finance, Elsevier, vol. 76(C).
    10. Milan Džogan & Roman Lacko & Zuzana Hajduová, 2025. "Empirical research of foreign direct investments efficiency in the European Union on the edge of pandemic outbreak," PLOS ONE, Public Library of Science, vol. 20(1), pages 1-13, January.
    11. Andrzej Cieślik & Monika Tarsalewska, 2025. "International mergers and acquisitions and institutional differences: An integrated approach," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 30(3), pages 2647-2661, July.
    12. Hornstein, Abigail S. & Naknoi, Kanda, 2023. "FDI commitments increase when uncertainty is resolved: Evidence from Asia," Journal of Asian Economics, Elsevier, vol. 87(C).
    13. Massil, Joseph Keneck & Tadadjeu, Sosson & Yogo, Urbain Thierry, 2025. "Uncertainty and household consumption in developing countries," Structural Change and Economic Dynamics, Elsevier, vol. 73(C), pages 51-64.

    More about this item

    JEL classification:

    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • F4 - International Economics - - Macroeconomic Aspects of International Trade and Finance

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hal:journl:hal-04356033. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: CCSD (email available below). General contact details of provider: https://hal.archives-ouvertes.fr/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.