The determinants of foreign direct investment in transforming economies: Empirical evidence from Hungary and China

Wang, Zhen Quan; Swain, Nigel

doi:10.1007/bf02707440

Cited by 137 publications

(76 citation statements)

References 7 publications

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“…There are several reasons why foreign investors might prefer faster growing markets. For example, cost efficiency of production and the realization of economies of scale and scope in production are closely linked with market size (Blonigen et al 2007;Filippaios et al 2003;Greenaway et al 2007;Vernon 1966;Wang and Swain 1995). Other things equal, a growing market can be attractive to FDI because of the likelihood that a larger market will enable a more efficient scale of production (Agosin and Machado 2007;Carstensen and Toubal 2004).…”

Section: Economic Growth As An Fdi Attractormentioning

confidence: 99%

Does Growth Attract FDI?

Iamsiraroj

Doucouliagos

2015

Economics

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FDI is seen widely as a vital source of investment, technology transfer, and growth. The factors that attract FDI have been a longstanding source of debate. The authors present a comprehensive assessment of the accumulated evidence on one factor, the success of economic growth in attracting FDI. Meta-regression analysis is applied to 946 estimates from 140 empirical studies. The results confirm that, on average, economic growth is an important determinant of FDI. Overall, there is a positive correlation between growth and FDI and this is much larger among single country case studies than with cross-country analysis.

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Section: Economic Growth As An Fdi Attractormentioning

confidence: 99%

Does Growth Attract FDI?

Iamsiraroj

Doucouliagos

2015

Economics

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“…Several studies find a positive and significant correlation between the level of GDP and FDI (Bhasin et al, 1994;UNCTAD, 1998;Morisset, 2000;Globerman and Shapiro, 2002;Nonnenberg and Mendonça, 2004), meanwhile other researchers de not only use the level of GDP but also the growth rate to show that the level of output (or the GDP per capita) and the growth prospects play an important role in FDI attracting (Wang and Swain, 1995;UNCTAD, 1998;Agiomirgianakis et al, 2006, the last using the GDP per capita and the growth rate). Lipsey (1999) and Agiomirgianakis et al (2006) also found that higher per capita income attracts FDI inflows, while Edwards (1990) and Jaspersen et al (2000) found the effects to be negative for developing countries.…”

Section: Determinants Of Fdi and Corruptionmentioning

confidence: 99%

Does corruption inhibit foreign direct investment?

Castro

Nunes²

2013

Revista Política

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Globalization creates new opportunities for firms to invest abroad and many economies are making active efforts to attract Foreign Direct Investment (FDI) in order to promote economic growth. Decisions to invest abroad depend on a complex set of factors, but the least corrupt countries may attract more foreign direct investment because they provide a more favorable climate for investors. In this paper we investigate the impact of corruption on FDI inflows in 73 countries, over the period 1998-2008. Our results suggest that countries where corruption is lower, the FDI inflows are greater, and so controlling corruption may be an important strategy for increase FDI inflows. Keywords: Corruption, Foreign Direct Investment, economic growth. ¿La corrupción inhibe La inversión extranjera Directa?La globalización ha creado nuevas oportunidades para invertir en el extranjero y muchas economías están haciendo esfuerzos para atraer inversión extranjera directa (IED) con el fin de promover el crecimiento económico. La decisión de invertir en el extranjero depende de un complejo conjunto de factores. No obstante, los países menos corruptos pueden atraer más inversión extranjera directa, ya que proporcionan un clima más favorable para los inversionistas. En este trabajo se investiga el impacto de la corrupción sobre los flujos de IED en 73 países, en el período 1998-2008. Los resultados sugieren que los países donde la corrupción es menor, las entradas de IED son mayores, por lo que el control de la corrupción puede ser una estrategia importante para aumentar los flujos de IED. Palabras clave: corrupción, Inversión extranjera directa, crecimiento económico.

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“…High labor costs has been found to be a deterrent to FDI in some studies (Belderbos & Carree, 2002;Cheng & Kwan, 2000;Fung et al, 2002;Wei & Liu, 2001;Li et al, 2008). However, Baghwati and Srinivasan (1983), Coughlin et al (1991) and Wang and Swain (1995) in their respective studies found a correlation between wage and labor cost. Broadman and Sun (1997), Chen (1996), and Head and Ries (1996) found a statistically insignificant correlation between the location of FDI and labor cost.…”

Section: The Determinants Of Location Choicementioning

confidence: 97%

FDI Location Decision: Evidence from Firms Investing in China

Belkhodja¹

2016

IJBM

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By relying on an extensive set of firm data for foreign affiliates in China, the paper investigates the determinants of FDI location choice for multinational firm subsidiaries located in different special economic and investment zones. Using a logit estimation, the results suggest that various factors explain the location choice of FDI in China, and vary according to the country of origin and the sector of activity. Overall, the results show that the protection of intellectual rights, the agglomeration economies, the investments in education and the GDP of the region affect the location choice of FDI. Implications can be drawn for policy-makers to divert FDI from coastal to inland regions. Finally, the last part of the paper derives, from the obtained results, implications for future research and theory building.

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The determinants of foreign direct investment in transforming economies: Empirical evidence from Hungary and China

Cited by 137 publications

References 7 publications

Does Growth Attract FDI?

Does Growth Attract FDI?

Does corruption inhibit foreign direct investment?

FDI Location Decision: Evidence from Firms Investing in China

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