Khachoo, Ab Quyoom and Khan, Mohd Imran (2012): Determinants of FDI inflows to developing countries: a panel data analysis.
Download (298Kb) | Preview
The aim of this paper is to identify, by estimating a panel econometric model, the factors determining FDI inflows to developing countries over a long period. The study is based on a sample of 32 developing countries. In our analysis, FDI inflows are modeled as a function of the market size, total reserves, infrastructure, labour cost and degree of openness for the host countries. Using data from 1982 to 2008, a panel data estimator suggests that the market size, total reserves, infrastructure and labour costs are the main determinants of FDI inflows to developing countries.
|Item Type:||MPRA Paper|
|Original Title:||Determinants of FDI inflows to developing countries: a panel data analysis|
|Keywords:||FDI Inflows; Fully Modified Ordinary Least Squares (FMOLS); Pedroni’s Panel Cointegration Methodology; Developing Countries|
|Subjects:||F - International Economics > F2 - International Factor Movements and International Business > F23 - Multinational Firms; International Business
C - Mathematical and Quantitative Methods > C2 - Single Equation Models; Single Variables > C23 - Models with Panel Data; Longitudinal Data; Spatial Time Series
F - International Economics > F2 - International Factor Movements and International Business > F21 - International Investment; Long-Term Capital Movements
|Depositing User:||Mohd Imran Khan|
|Date Deposited:||16. Mar 2012 14:32|
|Last Modified:||12. Feb 2013 00:24|
Agarwal, J.P. (1980), “Determinants of Foreign Direct Investment: A Survey”, Weltwirtschaftliches archive, vol. 116, pp. 739-773.
Asiedu (2005) ,“Foreign Direct Investment In Africa: The Role Of Natural Resources, Market Size, Government Policy, Institutions And Political Instability”, world institute for development economics research, Research paper no. 2005/24, UNU-WIDER.
Azam, M. (2010), “Economic determinants of FDI in Armenia, Kyrgyz Republic and Turkmenistan: Theory and Evidence.” Eurasian journal of business of economics, vol.3, pp. 27-40.
Baltagi, H. (2005), “Econometric Analysis of Panel data.” John Wiley and Sons, New York.
Bhasin, N. (2008), “Foreign Investment in India from 1947-48 to 2007-08.” New Century Publications New Delhi, India.
Buckley, P. J. and Casson, M. (1976), “The Future of Multinational Enterprise”, London: MacMillan.
Caves, R.E. (1982), “Multinational Enterprise and Economic Analysis, New York: Cambridge University Press.
Chopra, C. (2004), “Foreign Investment in India, Liberalization and WTO: The Emerging Scenario”, Deep and Deep Publications Private Ltd. New Delhi.
Dhakal, D. (2007),“Foreign Direct Investment and Transition Economies: Empirical Evidence from Panel Data Estimator”, Economics Bulletin, vol. 6(33), pp 1-9.
Dunning, J.H. (1988), “The Eclectic Paradigm of International Production: A Restatement and Some Possible Extensions”, Journal of International Business Studies, vol. 19, pp. 1-52.
Hymer, S. (1976), “The International Operations of Multinational Firms (1959): Ph.D. Thesis, Cambridge, MA: MIT Press.
Im, K.S., Pesaran, M. and Shin, Y. (2003), “Testing for Unit Root in Heterogeneous Panels”, Journal of Econometrics, vol. 115, pp.53-74.
Itaki, M. (1991), “A Critical Assessment of the Eclectic Theory of the Multinational Enterprise”, Journal of International Business Economics, vol. 25, pp. 445-460.
Lall, S. and Streeten, P. (1980), “Foreign Investment Transnational’s and Developing countries”, Macmillan Press Ltd. London.
Levin, A, C.F. Lin and C.J. Chu (2002), C.F. and Chu, C.J. (2002), “Unit Root Tests in Panel Data: Asymptotic and Finite-Sample Properties”, Journal of Econometrics, vol. 108, pp. 1-24.
Moosa, I. A. (2002), “Foreign Direct Investment, Theory Evidence and Practice”, Palgrave Publishers Limited, New York.
Naeem, Ijaz and Azam, M. (2005), “Determinants of Foreign Direct Investment in Pakistan: An Econometric Approach”, Sarhad J. Agric.vol. 21, pp. 761-764.
Nunnenkamp, P. and Julius, S. (2002), “Determinants of FDI in Developing Countries: Has Globalization Changed the Rules of the Game?” Transactional Corporations, vol. 11.
Parry, T.G. (1985), “Internalization as a General Theory of Foreign Investment: A Critique”, Weltwirtschaftliches Archive, vol. 121, pp.564-569.
Pedroni, P. (2000), “Fully Modified OLS for Heterogeneous Cointegrated Panels”, Advances in Econometrics, vol.15, pp. 93-130.
Root, F. and Ahmad, A. (1979), “Empirical Determinants of Manufacturing Direct Investment in Developing Countries”, Economic Development and Cultural Change, vol. 27, pp. 751-767.
Sahoo, P. (2006), “Foreign Direct Investment in South Asia: Policy, Trends, Impact and Determinants”, ADB Institute Discussion Paper No. 56.
Shamusddin, A. (1994), “Economic Determinants of Foreign Direct Investment in Less Developing Countries”, the Pakistan Development Review, vol. 33, pp. 41-51.
Tsai, P. (1994), “Determinants of Foreign Direct Investment and Its Impact on Economic Growth”, Journal of Economic Development, vol. 19, pp. 137-163.
Usha, B. (2006), “Foreign Direct Investment in India: Contemporary Issues”, Deep and Deep Publications Private Ltd. New Delhi, India.
Vijayakumar, N. (2010), “Determinants of FDI in BRICS Countries: A Panel Analysis”, International Journal of Business Sciences and Applied Management, vol. 5.
Wheeler, D and Mody, A. (1992), “International Investment Location Decisions: The Case of US Firms”, Journal of International Economics, vol. 33, pp.57-76.
Wooldridge, M. (1999), “Econometric Analysis of cross Section and Panel Data”, MIT Press, Cambridge.