We empirically investigates the factors that affect Foreign Direct Investment (FDI) inflows in five BRICS countries for the period 1990–2015. We address the selection bias and unobserved heterogeneity by estimating a panel Heckman selection method and attempts to account for both selection and endogeneity within the new two-stage method. After addressing the above mentioned econometric issues, the infrastructure and GDP per capita variables under the new two-stage method remain positive and significantly similar to the coefficient of infrastructure and GDP per capita under the panel Heckman selection model. In addition, the inverse Mills ratio maintain its level of statistical significance, confirming the presence of both sample selection bias and endogeneity.
If the inline PDF is not rendering correctly, you can download the PDF file here.
Adams S. (2010). Intellectual property rights and investment climate and FDI in developing countries. International Business Research 3(3): 201-209.
Ahmad N.A. Asmail N.W. and Nordin N. (2015). The impact of infrastructure on foreign direct investment in Malaysia. International Journal of management excellence 5(1): 584-590.
Akpan U.S. Isihak S.R. & Asongu S.A. (2014). “Determinants of Foreign Direct Investment in Fast-Growing Economies: A Study of BRICS and MINT” African Governance and Development Institute Working Paper No. 14/002.
Al-Sadig A. (2009). The effect of corruption on FDI inflows. Cato Journal 29 (2):267-294.
Ang J.B. (2008). Determinants of Foreign Direct Investment in Malaysia. Journal of Policy modeling 30:185-189.
Asiedu E. (2006) “Foreign direct investment in Africa: The role of natural resources market size government policy institutions and political instability” World Economy 29(1): 63-77.
Asiedu E. (2002). “On the Determinants of Foreign Direct Investment to Developing Countries: Is Africa Different?” World Development 30:107-119.
Bevan A.A and Estrin S. (2004). The determinants of Foreign Direct Investment into European Transition economies. Journal of Comparative economics 32:775-787.
Cakir M.Y. and Kabundi A. (2017). Transmission of China’s shocks to the BRIS countries. South African Journal of Economics 85: 430-454.
Cakir M.Y. and Kabundi A. (2013a). Trade shocks from BRIC to South Africa: A global VAR analysis. Economic Modelling 32: 190-202.
Cakir M.Y. and Kabundi A. (2013b). Business cycle co-movements between South Africa and the BRIC countries. Applied Economics 45: 4698-4718.
Carstensen K and Toubal F. (2004). Foreign Direct Investment in Central and Eastern European countries: A dynamic panel analysis. Journal of Comparative economics 32:3-22.
Demirhan E and Masca M. (2008). Determinants of FDI flows to developing countries: A cross-sectional analysis. Prague Economic Paper 4: 356-369.
Dunning J (1973). The determinants of international production. Oxford economic papers 25 (3): 289-336.
Forte R and Santos N. (2015). A cluster analysis of FDI in Latin America. Latin Journal of Economics 52 (1):25-56.
Jadhav P. (2012). “Determinants of Foreign Direct Investments in BRICS Economies: Analysis of Economic Institutional and Political Factors”. Procedia-Social and Behavioral Sciences 37 5-14.
Kishor P.R. Singh 2015. Determinants of FDI and its Impact on BRICS Countries: A Panel Data Approach J. Transnational Corporations Review 7 () 269-278.
Kumur N. (2001). Infrastructure availability foreign direct investment flows and their export-orientation: A cross country-exploration.
Lokesha B.K. and Leelavthy D.S. (2012) Determinants of Foreign Direct Investment: A macro Perspective. The Indian Journal of Industrial Relations 47(3): 459-469.
Mlachila M. and M. Takebe (2011). ‘FDI from BRICs to LICs: Emerging Growth Driver?’ IMF Working Paper N.11/178. Washington DC: IMF.
Montero A.P. (2008). Macroeconomic Deeds Not Reforms Words: The determinants of foreign direct investment in Latin America. Latin America Research Review 41(1):55-83.
Mottalab K.A. and Kalirajan K. (2010). Determinants of foreign direct investment in developing countries: A comparative analysis. ASARC working papers 2010/13.
Nunnenkamp P. & Spatz J. (2002). Determinants of FDI in developing countries: Has globalization changed the rules of the game? Transnational Corporations 11:1-34.
Phung H. (2016). Determinants of FDI into developing countries. Mark A Israel 91 Endowment Summer Research fund in Economics.
Ranjan V. & Agrawal G. (2011). FDI Inflow Determinants in BRIC countries: A Panel Data Analysis. International Business Research 4(4) 255. http://dx.doi.org/10.5539/ibr.v4n4p255.
Rehman C.A. Ilyas M. and Akram M. (2011). The impact of infrastructure on Foreign Direct Investment: The case of Pakistan. International Journal of Business and Management 6(5): 268-276.
Sahoo P. (2006). Foreign direct investment in South Asia: policy trends impact and determinants. ADB Institute Discussion Paper 56 ADB: Manila.
Sekkat K and Veganzones-Varoudakis M. (2007). Openness investment climate and FDI in developing countries. Review of Development Economics 11(4):607-620.
Semykina A. and J.M. Wooldridge (2010) “Estimating panel data models in the presence of endogeneity and selection” Journal of Econometrics 157(2): 375-380.
Shahmoradi B and Baghbanyan M. (2011). Determinants of Foreign direct investment in foreign country: A panel data analysis. Asian Economic and Financial Review 1 (2):49-56.
Sharma K. Nayagam J and Chung H.H. (2012). Determinants of Foreign Direct Investment in Malaysia: New Evidence from Cointegration and Error correction Model. The Journal of Developing Areas 46(1): 71-89.
Taylor C.T. (2000). The impact of host country government policy on US Multinational investment decisions. The World Economy 23 (5): 635-647.
Tintin C. (2013). The Determinants of Foreign Direct Investment Inflows in the Central and Eastern European Countries: The Importance of Institutions. Communist and Post-Communist Studies 46(2) 287-298.
Vijayakumar N. Sridharan P and Sekhara Rao K.K. (2010). Determinants of FDI in BRICS countries: A panel data analysis. International Journal of Business Science and Applied Managemant 5(3): 1-13
Vijayakumar N. Sridharan P. & Rao K.C. (2010). Determinants of FDI in BRICS Countries: A panel analysis. International Journal of Business Science and Applied Management 5(3) 1-13.
Williams K. (2015). Foreign Direct Investment in Latin America. Latin America Journal of Economics 52 (1): 55-77
Wooldridge J.M. (1995) “Selection corrections for panel data models under conditional mean independence assumptions” Journal of Econometrics 68: 115-132.
Xaypanya P. Rangkakulnuwat P. & Paweenawat S.W. (2015). The determinants of foreign direct investment in ASEAN. The first differencing panel data analysis. International Journal of Social Economics 42(3) 239-250.