Institutions and FDI: evidence from developed and developing countries

Sabir, Samina; Rafique, Anum; Abbas, Kamran

doi:10.1186/s40854-019-0123-7

Cited by 225 publications

(198 citation statements)

References 48 publications

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“…With appropriate Chinese investor decisions and a favorable business environment in the host countries, the efficiency of Chinese OFDI could be significantly improved [2]. However, as most existing studies have analyzed Chinese OFDI location choice determinants based on aggregate OFDI data [3][4][5][6][7][8][9], the specific determinants in each industry have not been distinguished. Further, because of potential extreme values, aggregate OFDI data can suffer from skewed data structures, which may adversely affect model fit and estimations [10].…”

Section: Introductionmentioning

confidence: 99%

Chinese Industrial Outward FDI Location Choice in ASEAN Countries

Zeng

et al. 2020

Sustainability

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This paper examined the location choices of Chinese outward FDI (OFDI) from 2005–2016 with a particular focus on the Association of Southeast Asian Nations (ASEAN) countries. It was found that Chinese OFDI in ASEAN countries was generally focused on areas that had large potential markets and low tax rates. Unlike previous studies, it was found that primary and secondary industry labor costs were the main motivators rather than resource-seeking. The business environment in the host countries was also found to have positive and significant effects on Chinese OFDI location choice for the agricultural, mining, construction, and information industries. The insights in this paper could provide useful suggestions for both governments and investors.

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Section: Introductionmentioning

confidence: 99%

Chinese Industrial Outward FDI Location Choice in ASEAN Countries

Zeng

et al. 2020

Sustainability

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“…In the developing countries, the institutional quality effect was insignificant because of the weak structure of institutions. However, in the most recent study of Sabir et al (2019) the positive relationship between institutional quality and FDI was reported for all groups of countries from low, lower-middle, upper-middle to high-income ones.…”

Section: Literature Reviewmentioning

confidence: 90%

Institutional Quality and Foreign Direct Investment Inflows: The Case of Vietnam

Minh

2019

Asian Economic and Financial Review

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This article examines the effect of institutional quality on Foreign Direct Investment (FDI) inflows in Vietnam, using a set of panel data from a Provincial Competitiveness Index (PCI) survey and inward FDI to 59 provinces and cities of Vietnam in the period of 2010-2017. This study also accounts for the fundamental determinants of FDI and gravity variables that are widely used in studies of FDI. In order to tackle the problem of endogeneity including reverse causality, a very classic problem facing almost the researches on determinants of FDI, this study applies Difference Generalize Method of Moments (GMM) estimation with period-specific predetermined instruments to investigate the relation between quality of provincial governance and FDI inflows. After controlling for factors other than institutional quality, the outcome shows that the provincial competitiveness index in terms of institutional quality is significant in explaining the difference in inward FDI from province to province in Vietnam. Contribution/ Originality: This is one of the first panel data studies of institutional effect on FDI inflows at the provincial level in Vietnam using the Provincial Competitiveness Index (PCI) as a proxy for the quality of regional institutions.

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“…Results reveal that the improvement of the institutional framework should precede foreign direct investment attraction policies in order to benefit FDI-led growth. Sabir (2019) this paper examines the impact of institutional quality on foreign direct investment inflows using panel data for income countries (low, lower-middle, upper-middle, high). Using a sample period from 1996-2016.…”

Section: Business and Economic Researchmentioning

confidence: 99%

Does FDI Caused Profit Repatriation: Exploring the Moderating Role of Governance Institutions

Faheem

Siddiqui

2020

BER

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This paper investigates the impact of foreign direct investment, institutional quality on profit repatriation and net primary income taken as a proxy of profit repatriation. Inflation and GDP per capital were taken as controls. Data sample of 54 countries (developing) has been used for the first model of this research. And data sample of 100 countries (developed and developing both) has been used for the second model. The sample period is from 2008-2017. Finding of this study indicate that institutions quality is negatively impacting profit repatriation and net primary income. It also reveals foreign direct investment is negatively affecting profit repatriation but positively impacting net primary income. Results reveal that investors are unwilling to invest in countries where institutions encourage corruption, because these factors increase the cost of doing business. Developing countries have weaker institutions than developed countries and so, investors will be taking their profit back and not willing to re-invest in that particular country.

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Institutions and FDI: evidence from developed and developing countries

Cited by 225 publications

References 48 publications

Chinese Industrial Outward FDI Location Choice in ASEAN Countries

Chinese Industrial Outward FDI Location Choice in ASEAN Countries

Institutional Quality and Foreign Direct Investment Inflows: The Case of Vietnam

Does FDI Caused Profit Repatriation: Exploring the Moderating Role of Governance Institutions

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