Determinants of Foreign Direct Investment in Developed and Emerging Markets

Jerzy Różański, Paweł Sekuła

DOI: http://dx.doi.org/10.12775/DEM.2016.005

Abstract


We analyzed FDI determinants for 26 developed economies and 25 emerging markets. The analysis was conducted using a panel regression model for the period 1996–2014 as well as macroeconomic and institutional variables. Growth dynamics, increasing welfare, and the size of the market positively influence FDI. Among institutional variables, government stability index and the rule of law index exert positive impact upon FDI. Misgivings with respect to the quality of democracy and corruption do not undermine FDI inflow.

Keywords


developed economies; emerging markets; foreign direct investment; institutional determinants; panel data.

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ISSN (print) 1234-3862
ISSN (online) 2450-7067

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