Determinants of FDI Inflows in Advanced Economies: Does the Quality of Economic Structures Matter?

Abstract

This paper should not be reported as representing the views of the European Central Bank (ECB). The views expressed are those of the authors and do not necessarily reflect those of the ECB.

Financial Development and FDI Flows: Evidence from Advanced Economies

“…The negative effect is empirically established in the recent study by Dellis et al (2017) who use the ratio of tax revenues to GDP. Gastanga et al (1998) find that taxation becomes detrimental after a certain threshold whereas Wei (2000) estimates that a one percentage point increase in the tax rate reduces FDI flows by 4,8%.…”

“…The latter trend towards emerging economies has been mostly due to institutional and reform factors (Grigonyte, 2010) which will be addressed. Nonetheless, there are studies that reveal a negative relationship between unit labor costs and inbound FDI (Bevan and Estrin, 2004;Demekas et al, 2005;Dellis et al, 2017) indicating that low production costs matter inter alia for the location choice faced by a multinational. Finally, trade openness measured as the sum of exports and imports over GDP has been examined as a determinant of FDI flows.…”

“…A fair number of empirical studies have established the exceptional role of infrastructure both for developing as well as developed economies in their search for inward FDI flows (Grigonyte, 2010;Alam and Shah, 2013;Demekas et al, 2005;Walsh and Yu, 2010). Apart from the wage costs discussed above, the overall functioning and flexibility of labor markets appears to attract capital flows (Walsh and Yu, 2010;Ciriaci et al, 2016;Dellis et al, 2017) as do competitive and well-functioning product markets (Benassy-Quere et al, 2005;Ciriaci et al, 2016;Canton and Solera, 2016).…”

Contextualizing international ambidextrous strategies of Chinese multinational enterprises

“…For host‐country level data, we used the 12th pillar of Global Competitiveness Index (GCI) (Innovation environment). GCI indicators have already been used to proxy country variables (e.g., Dellis, Sondermann, & Vansteenkiste, 2017). The timeline of home country policies affecting outward FDI has been reconstructed based on previous research (Breinbauer, 2019; Cross et al, 2007) and official policy documents (Chinese Government, 2017).…”

The Need of a New Management Regarding the Contradictory East-West European Capital and Labour Flows. A Regional Welfare Approach

“…Dellis K., Sondermann D, & Vansteenkiste I. (Dellis et al, 2017) 2017 Model -the FDI flows are analysed from the economic perspective of 21 OECD states during 2005-2014; -indicators of influence on FDI absorption are established, such as: the quality of the Labour / goods market ratio, business conditions, the quality of the political institutions.…”