Determinants of FDI inflows to developing countries: a panel data analysis

Khachoo, Ab Quyoom and Khan, Mohd Imran (2012): Determinants of FDI inflows to developing countries: a panel data analysis.

Abstract

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
• Language: English
• 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 - Panel Data Models ; Spatio-temporal Models; F - International Economics > F2 - International Factor Movements and International Business > F21 - International Investment ; Long-Term Capital Movements

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