Does Public Governance Always Matter? How Experience of Poor Institutional Quality Influences FDI to the South

41 Pages Posted: 12 Jan 2011

See all articles by Julia Darby

Julia Darby

University of Strathclyde, Glasgow - Strathclyde Business School - Department of Economics

Rodolphe Desbordes

SKEMA Business School

Ian Wooton

University of Strathclyde - Department of Economics; Centre for Economic Policy Research (CEPR); CESifo (Center for Economic Studies and Ifo Institute)

Multiple version iconThere are 2 versions of this paper

Date Written: December 30, 2010

Abstract

This paper investigates whether the higher prevalence of South multinational enterprises (MNEs) in risky developing countries may be explained by the experience that they have acquired of poor institutional quality at home. We confirm the intuition provided by our analytical model by empirically showing that the positive impact of good public governance on foreign direct investment (FDI) in a given host country is moderated significantly, and even in some cases eliminated, when MNEs have been faced with poor institutional quality at home.

Keywords: South-South FDI, public governance, institutions

JEL Classification: F22

Suggested Citation

Darby, Julia and Desbordes, Rodolphe and Wooton, Ian, Does Public Governance Always Matter? How Experience of Poor Institutional Quality Influences FDI to the South (December 30, 2010). Available at SSRN: https://ssrn.com/abstract=1738168 or http://dx.doi.org/10.2139/ssrn.1738168

Julia Darby

University of Strathclyde, Glasgow - Strathclyde Business School - Department of Economics ( email )

Sir William Duncan Building
130 Rottenrow
Glasgow, G4 0GE
United Kingdom

HOME PAGE: http://www.economics.strath.ac.uk/julia/

Rodolphe Desbordes (Contact Author)

SKEMA Business School ( email )

Lille
France

Ian Wooton

University of Strathclyde - Department of Economics ( email )

Sir William Duncan Building
130 Rottenrow
Glasgow G4 0GE
United Kingdom

Centre for Economic Policy Research (CEPR)

London
United Kingdom

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

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