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The Determinants of Foreign Direct Investment in Australia

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  • JEANNIE YIH YUN YANG
  • NICOLAAS GROENEWOLD
  • MOONJOONG TCHA

Abstract

Australia is a recipient of large foreign direct investment (FDI) flows by world standards. Despite this, there is little empirical work on the determinants of FDI in Australia. We carry out an econometric analysis of the determinants of aggregate FDI inflows into Australia since the mid‐1980s. We find that interest rates, wage changes, a measure of the openness of the economy and a variable representing industrial disputes are important determinants of FDI inflow into Australia over the period. The estimated model successfully explains within‐sample variability but this success is greater in the beginning of the sample than at the end.

Suggested Citation

  • Jeannie Yih Yun Yang & Nicolaas Groenewold & Moonjoong Tcha, 2000. "The Determinants of Foreign Direct Investment in Australia," The Economic Record, The Economic Society of Australia, vol. 76(232), pages 45-54, March.
    • Handle: RePEc:bla:ecorec:v:76:y:2000:i:232:p:45-54
    DOI: 10.1111/j.1475-4932.2000.tb00004.x
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