Media freedom, information and communication technology infrastructure, and foreign direct investment inflows

Abstract

In an era of globalization, attracting foreign capital inflows remains a significant concern among nations. This paper aims to examine the individual and joint effects of media freedom and information and communication technologies (ICT) infrastructure on foreign direct investment (FDI) inflows. Utilizing a panel dataset of FDI inflows from 144 countries worldwide from 2003 to 2016 for our empirical analysis, we find that media freedom significantly increases FDI inflows. Interestingly, ICT infrastructure plays an essential moderating role in this relationship. When ICT infrastructure is underdeveloped, the expected impact of media freedom may not materialize; however, as the level of ICT infrastructure improves, the positive effect of media freedom becomes increasingly significant. Hence, we argue that a free media and robust ICT infrastructure are complementary in attracting FDI. Our study not only fills a crucial gap in the literature by examining their joint effect but also provides insightful implications for host countries looking to attract foreign investment. This work thus significantly contributes to understanding the complex relationships among media freedom, ICT infrastructure levels, and FDI inflows at the national level.