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Determinants of FDI inflows to developing countries: a panel data analysis

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  • Khachoo, Ab Quyoom

Abstract

The aim of this paper is to identify, by estimating a panel econometric model, the factors determining FDI inflows to developing countries over a long period. The study is based on a sample of 32 developing countries. In our analysis, FDI inflows are modeled as a function of the market size, total reserves, infrastructure, labour cost and degree of openness for the host countries. Using data from 1982 to 2008, a panel data estimator suggests that the market size, total reserves, infrastructure and labour costs are the main determinants of FDI inflows to developing countries.

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  • Khachoo, Ab Quyoom, 2012. "Determinants of FDI inflows to developing countries: a panel data analysis," MPRA Paper 94131, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:94131
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    Cited by:

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    3. Sushil K. Rai & Akhilesh K. Sharma, 2020. "Causal Nexus Between FDI Inflows and Its Determinants in SAARC Countries," South Asia Economic Journal, Institute of Policy Studies of Sri Lanka, vol. 21(2), pages 193-215, September.
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    7. Helmi Hammami & Moez Hammami & Siriki Coulibaly & Mariem Marzouk, 2020. "Determinants of FDI attractiveness: A MCI model approach," Economics Bulletin, AccessEcon, vol. 40(2), pages 1033-1048.
    8. Nasser A. Alkathiri & Mohammad Soliman, 2022. "Examining foreign direct investment determinants of tourism industry in Oman and Egypt: The moderating role of investment environment," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 27(4), pages 4722-4740, October.
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    10. Manuel Fernandez & Aysha Abdulla Ahmed Aljeed Alnuaimi & Robinson Joseph, 2020. "FDI Environment in China: A Critical Analysis," International Journal of Financial Research, International Journal of Financial Research, Sciedu Press, vol. 11(5), pages 238-253, October.
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    More about this item

    Keywords

    FDI Inflows; Fully Modified Ordinary Least Squares (FMOLS); Pedroni’s Panel Cointegration Methodology; Developing Countries;
    All these keywords.

    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements

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