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In the era of globalization, FDI plays an important role as it intensifies the interaction among the countries, regions, and firms. FDI is playing a crucial role in improving the infrastructural facilities of countries and enhancing economic situation especially in the developing countries. Another important aspect of FDI is it increases employment in domestic economies, which in turn reduces the poverty level and also promotes the competition in domestic markets. With these activities, the government earns more revenue, which can be used for developmental activities. In this context, the chapter makes an attempt to identify the determining factors of FDI inflows into developing economies by selecting nine developing countries for the time period 2000-2015. Due to the different characteristics of each of these countries, there is a lot of heterogeneity in the data. To reduce the heterogeneity among the selected economies, the authors propose employing a panel data approach to identify the factors that influence the FDI inflows.

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