Institutions and Outward Foreign Direct Investment

Open access

Abstract

This paper explores the influence of the quality of a host country’s institutional environment on outflows from that country of foreign direct investment. The main finding of this paper is that such quality does play an important role, particularly with respect to governance quality and political stability. This implies that better institutional conditions may reduce undesirable outflows of capital, and the quality of those institutions may impact FDI effectiveness in host countries.

If the inline PDF is not rendering correctly, you can download the PDF file here.

  • Ali F. Fiess N. MacDonald R. (2010) Do Institutions Matter for Foreign Direct Investment? Open Economies Review Vol. 21 (2) pp. 201–219.

  • Baum C. (2006). An Introduction to Modern Econometrics Using Stata College Station: Stata Press.

  • Bénassy-Quér A. Coupet M. Mayer T. (2007) Institutional Determinants of Foreign Direct Investment. The World Economy Vol. 30 (5) pp. 764–782.

  • Busse M. Hefeker C. (2007) Political risk Institutions and Foreign Direct Investment European Journal of Political Economy Vol. 23 (2) pp. 397–415.

  • Caves R. (2007) Multinational Enterprise and Economic Analysis. Cambridge: Cambridge University Press.

  • Daniele V. Marani U. (2011) Organized crime the quality of local institutions and FDI in Italy: A panel data analysis. European Journal of Political Economy Vol. 27 (1) pp. 132–142.

  • Desai M. A. Dharmapala D. (2009) Taxes institutions and foreign diversification opportunities Journal of Public Economics Vol. 93 issue 5/6 pp. 703–714.

  • Djankov S. McLiesh C. Schleifer A. (2007) Private Credit in 129 Countries Vol. 84 issue 2 Journal of Financial Economics pp. 299–329.

  • Dunning J. (1998) Location and Multinational Enterprise: A Neglected Factor? Journal of International Business Studies Vol. 29 issue 1 pp. 45–66.

  • Globerman S. Shapiro D. (2002) Global Foreign Direct Investment Flows: The Role of Governance Infrastructure. World Development Vol. 30 (11) pp. 1899–1919.

  • Goldstein A. (2009) Multinational Companies from Emerging Economies Palgrave Macmillan.

  • Harms P. Ursprung H. (2002) Do Civil and Political Repression Really Boost Foreign Direct Investments? Economic Inquiry Vol. 40 (4) pp. 651–663.

  • Hoechle D. (2007) Robust standard errors for panel regressions with cross-sectional dependence The Stata Journal Vol. 7 (3) pp. 281–312.

  • Jensen N. (2003) Democratic Governance and Multinational Corporations: Political Regimes and Inflows of Foreign Direct Investment. International Organization Vol. 57 (3) pp. 587–616.

  • Ju J. Wei S.-J. (2007) Domestic Institutions and the Bypass Effect of Financial Globalization. NBER Working Paper No. 13148.

  • Kaufman D. Kraay A. Mastruzzi M. (2010) The Worldwide Governance Indicators Methodology and Analytical Issues World Bank Policy Research Working Paper 5430.

  • Kayam S. S. (2009) Home market determinants of FDI outflows from developing and transition economies. unpublished pp. availalbe: mpra.ub.uni-muenchen.de/16781/1/homeFDI.pdf

  • Keefer P. Knack S. (1997) Why Don’t Poor Countries Catch Up? A Cross-National Test of Institutional Explanation. Economic Inquiry Vol. 35 Issue 3 pp. 590–602.

  • LaPorta R. Lopez de Silvanes F. Shleifer A. Vishny R. (1998) The Quality of Government NBER Working Paper no 6727.

  • Mishra A. Daly K. (2007) Effects of Quality of Institutions on Outward Foreign Direct Investment The Journal of International Trade & Economic Development Vol. 16 (2) pp. 231–244.

  • National Bank of Poland (2012) Polish Foreign Direct Investment in 2011 (in Polish) Warsaw: National Bank of Poland.

  • North D. C. (1990) Institutions Institutional Change and Economic Performance Cambridge: Cambridge University Press.

  • OECD (2011) Moving to a new framework for monetary policy. In OECD Economic Surveys: Russian Federation 2011 (p. 126) OECD Publishing.

  • Witt M. A. Lewin A. Y. (2007) Outward foreign direct investment as escape response to home country institutional constraints. Journal of International Business Studies Vol. 38 (4) pp. 579–594.

Search
Journal information
Cited By
Metrics
All Time Past Year Past 30 Days
Abstract Views 0 0 0
Full Text Views 333 150 0
PDF Downloads 177 112 2