Growth Effect of Foreign Direct Investment in Developing Economies: The Role of Institutional Quality

Jude, Cristina; Levieuge, Grégory

doi:10.1111/twec.12402

Cited by 125 publications

(88 citation statements)

References 62 publications

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“…9, No. 7;2017 Recently the institutional impact on the inflow of foreign direct investment has received higher level of attention to identify the locational advantage of MNEs' which is less researched. The country with good institutions tends to have positive effect on productivity with less uncertainty and higher expected rates of return.…”

Section: Literature Reviewmentioning

confidence: 99%

Does Institution Affect the Inflow of FDI? A Panel Data Analysis of Developed and Developing Countries

Siddica

Angkur²

2017

IJEF

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The objective of this paper is to study the institutional impact on the net FDI inflow along with the other possible determinants of Foreign Direct Investment (FDI) in 40 countries comprising of developing and developed countries over the period of 1990-2010 by using panel econometric model. The dependent variable of our study is log of net FDI inflows measured at current US million dollars of different countries in different points in time and independent variables are log of GDP measured at current US dollars, total trade as a share of GDP, gross fixed capital formation as a share of GDP, inflation as measured by consumer price index (annual %) and log of composite index for infrastructure and a number of institutional variables such as investment profile, law and order and bureaucratic quality. According to the econometric results, the coefficients of log of GDP, trade to GDP ratio, gross fixed capital formation (% GDP), and log of composite index for infrastructure and institutional variables are positive and significant but coefficient of inflation (%, CPI) is negative and significant. Moreover, the institutional variables-investment profile and law and order have positive effect on FDI and bureaucratic quality has negative effect and also statistically significant.

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Section: Literature Reviewmentioning

confidence: 99%

Does Institution Affect the Inflow of FDI? A Panel Data Analysis of Developed and Developing Countries

Siddica

Angkur²

2017

IJEF

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“…Insecurity may prevent trade even though it offers potential mutual gains [21,46] Inward FDI flows attract advanced foreign technology and innovative managerial skills. This, in turn, leads to a better distribution of CP support [47] Better IQ causes higher inward FDI flows forming a favourable environment and a flexible local government decision-making system [21,23,48,49] Territorial capital/ conditions…”

Section: Conditioning Factor Effect On Outcomes Of the Cp Relation Wimentioning

confidence: 99%

“…The ambiguous results of previous research (see Appendix A) incite much debate in political and scientific areas about regional conditions that could lead to the heterogeneous outcomes of the CP. It has already been ascertained that institutional quality is mediating the effect of the CP on growth [5,[16][17][18][19] and that institutions can be considered as a factor that connects or at least influences all other factors that mediate outcomes of the CP [16,[20][21][22][23][24][25]. However, no research examines how institutions shape the convergence outcomes of the CP.…”

Section: Introductionmentioning

confidence: 99%

Mediating Effects of Cohesion Policy and Institutional Quality on Convergence between EU Regions: An Examination Based on a Conditional Beta-Convergence Model with a 3-Way Multiplicative Term

2020

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The paper contributes to the existing literature on the EU's Cohesion Policy outcomes by extending the conditional beta-convergence model with a 3-way multiplicative term to examine the mediating effects of the Cohesion Policy, institutional quality, and their interaction on regional convergence. The empirical analysis based on conditional slope coefficients and conditional standard errors provides evidence that both the mediating factors under consideration contribute positively to boosting regional convergence in the EU at the NUTS 2 and 3 disaggregation level, but with much bigger success over the 2007-2013 programming period compared to the previous one. Moreover, Cohesion Policy and institutional quality act as substituting rather than complementary mediating factors.

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“…Other institutions that have been researched are for instance the presence of corruption and bureaucratic quality [33]. …”

Section: Introductionmentioning

confidence: 99%

Net profit flow per country from 1980 to 2009: The long-term effects of foreign direct investment

Akkermans

2017

PLoS ONE

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Aim of the paperThe paper aims at describing and explaining net profit flows per country for the period 1980-2009. Net profit flows result from Foreign Direct Investment (FDI) stock and profit repatriation: inward stock creating a profit outflow and outward FDI stock a profit inflow. Profit flows, especially 'normal' ones are not commonly researched. Theoretical backgroundAccording to world-system theory, countries are part of a system characterised by a core, semi-periphery and periphery, as shown by network analyses of trade relations. Network analyses based on ownership relations of TransNational Corporations (TNCs) show that the top 50 firms that control about 40% of the world economy are almost exclusively located in core countries. So, we may expect a hierarchy in net profit flows with core countries on top and the periphery at the bottom. FDI outflows from the core countries especially rose in the 1990s, so we may expect that the difference has grown in time.

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Growth Effect of Foreign Direct Investment in Developing Economies: The Role of Institutional Quality

Cited by 125 publications

References 62 publications

Does Institution Affect the Inflow of FDI? A Panel Data Analysis of Developed and Developing Countries

Does Institution Affect the Inflow of FDI? A Panel Data Analysis of Developed and Developing Countries

Mediating Effects of Cohesion Policy and Institutional Quality on Convergence between EU Regions: An Examination Based on a Conditional Beta-Convergence Model with a 3-Way Multiplicative Term

Net profit flow per country from 1980 to 2009: The long-term effects of foreign direct investment

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