Final published version
Research output: Contribution to Journal/Magazine › Journal article › peer-review
Research output: Contribution to Journal/Magazine › Journal article › peer-review
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TY - JOUR
T1 - Foreign direct investment determinants in OECD and developing countries
AU - Economou, Fotini
AU - Hassapis, Christis
AU - Philippas, Nikolaos
AU - Tsionas, Efthymios
PY - 2016/5/26
Y1 - 2016/5/26
N2 - In this paper we examine the foreign direct investment (FDI) inflow determinants in 24 Organisation for Economic Co-operation and Development (OECD) and 22 developing (non-OECD) countries over 1980–2012, using the standard fixed effects as well as a dynamic panel approach. The most robust finding is that lagged FDI, market size, gross capital formation and corporate taxation significantly affect FDI inflows in OECD countries. We also examine a group of developing countries, taking into consideration the increased share of world FDI inflows that developing countries have attracted, and compare the results. In this case, lagged FDI, market size, labor cost and institutional variables provide the most robust results. The empirical results have important policy implications indicating the factors that host economies should emphasize in order to attract FDI inflows.
AB - In this paper we examine the foreign direct investment (FDI) inflow determinants in 24 Organisation for Economic Co-operation and Development (OECD) and 22 developing (non-OECD) countries over 1980–2012, using the standard fixed effects as well as a dynamic panel approach. The most robust finding is that lagged FDI, market size, gross capital formation and corporate taxation significantly affect FDI inflows in OECD countries. We also examine a group of developing countries, taking into consideration the increased share of world FDI inflows that developing countries have attracted, and compare the results. In this case, lagged FDI, market size, labor cost and institutional variables provide the most robust results. The empirical results have important policy implications indicating the factors that host economies should emphasize in order to attract FDI inflows.
U2 - 10.1111/rode.12269
DO - 10.1111/rode.12269
M3 - Journal article
JO - Review of Development Economics
JF - Review of Development Economics
SN - 1363-6669
ER -