Crisis Exacerbated Fiscal Deficits and Possible Impact on FDI Flows: An Empirical Analysis of Emerging Europe and India
AEID, Vol. 12, No. 1, January-June 2012
Posted: 5 Nov 2012
Date Written: November 5, 2012
In this paper we try to determine the FDI encouraging or debilitating effect of government balances relative to other determinants of inward FDI. In a dynamic panel regression with data from 14 European countries and India, fiscal health by itself is found to be a very significant determinant of FDI inflows vis-à-vis certain other economic and developmental policy indicators.
Keywords: FDI, fiscal balance/deficit, global crisis, dynamic panel regression
JEL Classification: F33, C33
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