“…Fixed effect panel models are likely to be superior on theoretical grounds, as they control for time-invariant heterogeneity across countries and are relatively robust to omitted variable bias (Chamberlain, 1978;Hausman and Taylor, 1981). Pooled OLS models can however be effectively used to evaluate the robustness of the results.…”
This paper examines the role that political factors play in the investment location decisions of multinational enterprises. It has been found that foreign direct investors shy away from countries with excessive government spending, especially when this spending is directed towards the military. They also seem to have a slight preference for leftist executives and be negatively predisposed toward situations in which the ruling party has held power for prolonged periods of time. Ceteris paribus, more FDI flows to countries that have presidential systems, established political parties and where the party of the executive controls all houses with lawmaking powers.
JEL classifications: F21; F50; P16
“…Fixed effect panel models are likely to be superior on theoretical grounds, as they control for time-invariant heterogeneity across countries and are relatively robust to omitted variable bias (Chamberlain, 1978;Hausman and Taylor, 1981). Pooled OLS models can however be effectively used to evaluate the robustness of the results.…”
This paper examines the role that political factors play in the investment location decisions of multinational enterprises. It has been found that foreign direct investors shy away from countries with excessive government spending, especially when this spending is directed towards the military. They also seem to have a slight preference for leftist executives and be negatively predisposed toward situations in which the ruling party has held power for prolonged periods of time. Ceteris paribus, more FDI flows to countries that have presidential systems, established political parties and where the party of the executive controls all houses with lawmaking powers.
JEL classifications: F21; F50; P16
“…One strand of literature that I do not consider are studies of the return to schooling that attempt to control for ability using observed test scores. Some of the subtle issues involved in developing a causal framework for the interpretation of test scores, schooling outcomes, and earnings are considered in Griliches (1977Griliches ( , 1979, Chamberlain (1977) and Griliches (1975, 1977).…”
Section: A Selective Review Of Recent Empirical Studiesmentioning
“…A consequence is that not only are we unable to estimate the effects of important variables like teachers' preparation, but also our estimators for other effects in the model may be biased and thus misleading. This problem is often called an omitted variable bias (see, e.g., Chamberlain, 1978).…”
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