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The influence of Doing Business’ institutional variables in Foreign Direct Investment

Author

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  • Andreia Olival

    (Católica Lisbon School Of Business and Economics)

Abstract

The growing importance of institutions as a determinant of inward FDI has sparked interest in determining their relationship. In the present study, we intended to explore the relationship between the institutional variables of the Doing Business report and inward FDI. The main question is whether Doing Business indicators explain worldwide differences in FDI. Doing Business is an international report that describes the business environment in various countries, through quantitative and qualitative indicators of the functioning of representative institutions. Our analysis covers 33 advanced economies and 144 developing countries for the 2004-2009 periods. The major implication is that in general, a better rated business environment is more likely to attract greater amounts of FDI, especially in case of developing countries. Moreover institutional areas that are most likely to influence inward FDI are: starting a business, registering a property and trading across borders.

Suggested Citation

  • Andreia Olival, 2012. "The influence of Doing Business’ institutional variables in Foreign Direct Investment," GEE Papers 0048, Gabinete de Estratégia e Estudos, Ministério da Economia, revised Dec 2012.
  • Handle: RePEc:mde:wpaper:0048
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    File URL: http://www.gee.gov.pt/RePEc/WorkingPapers/GEE_PAPERS_48.pdf
    File Function: First version, 2012
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    References listed on IDEAS

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    Cited by:

    1. Alessandro Borin & Riccardo Cristadoro & Elena Mattevi, 2014. "Foreign direct investment and institutional quality," Questioni di Economia e Finanza (Occasional Papers) 230, Bank of Italy, Economic Research and International Relations Area.
    2. Alessandro Borin & Riccardo Cristadoro, 2014. "Foreign direct investment and multinational firms," Questioni di Economia e Finanza (Occasional Papers) 243, Bank of Italy, Economic Research and International Relations Area.

    More about this item

    Keywords

    Foreign Direct Investment; Institutional determinants; Doing Business;

    JEL classification:

    • F30 - International Economics - - International Finance - - - General
    • H00 - Public Economics - - General - - - General

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