Download This PaperPolitical Risk, Institutions and Foreign Direct Investment
28 Pages Posted: 21 Apr 2005
Date Written: April 2005
Abstract
The paper explores the linkages between political risk, institutions and foreign direct investment inflows. Using different econometric techniques for a data sample of 83 developing countries and the period 1984 to 2003, we identify those indicators that matter most for the activities of multinational corporations. Overall, 12 different indicators for political risk and institutions are employed in the empirical analysis. The results show that government stability, the absence of internal conflict and ethnic tensions, basic democratic rights and ensuring law and order are highly significant determinants of foreign investment inflows.
Keywords: Political risk, institutions, FDI, multinational corporations
JEL Classification: C31, C33, F21, F23
Suggested Citation: Suggested Citation
Do you have a job opening that you would like to promote on SSRN?
Recommended Papers
-
Do Civil and Political Repression Really Boost Foreign Direct Investments?
-
Does the Quality of Institutions Limit the Mena's Integration in the World Economy?
-
Foreign Direct Investment, Economic Freedom and Growth: New Evidence from Latin-America
-
Foreign Direct Investment and Human Capital: The Role of Political and Civil Rights
By Nabamita Dutta and Kwasi Osei-yeboah
-
What Attracts Foreign Direct Investment: A Closer Look
By Nabamita Dutta and Sanjukta Roy