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Institutional determinants of foreign direct investment inflows: evidence from emerging markets

Author

Listed:
  • Justin Paul
  • Pravin Jadhav

Abstract

Purpose - Foreign direct investment (FDI) is a strategic decision for achieving competitive advantage by multinational enterprises. The purpose of this paper is to explore the role of institutional determinants of FDI using data from 24 emerging markets including China, India, Indonesia, Turkey, Thailand, Malaysia and Pakistan. Design/methodology/approach - In order to identify factors that attract FDI in emerging markets, this study has used data from sources such as the World Bank, Index of Economic Freedom and UNCTAD. Findings - The findings of this research indicate that infrastructure quality, trade cost measured by tariff and non-tariff barriers, institutional quality measured by effective rule of law, political stability, regulatory quality and control on corruption are significant determinants of FDI in emerging markets. Originality/value - This is the first study to analyze the sectoral institutional determinants of Inward FDI in the important emerging economies, to the best of authors’ knowledge.

Suggested Citation

  • Justin Paul & Pravin Jadhav, 2019. "Institutional determinants of foreign direct investment inflows: evidence from emerging markets," International Journal of Emerging Markets, Emerald Group Publishing Limited, vol. 15(2), pages 245-261, August.
    • Handle: RePEc:eme:ijoemp:ijoem-11-2018-0590
    DOI: 10.1108/IJOEM-11-2018-0590
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    Citations

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    Cited by:

    1. Satya Prasad Padhi, 2024. "Indian Experience of Managing Impossible Trinity, Growth and Possible Tradeoff Between FDI and FIIs: Nature of Capital Inflows Matter," Global Journal of Emerging Market Economies, Emerging Markets Forum, vol. 16(1), pages 44-63, January.
    2. F. Robert Buchanan, 2020. "Hopefulness and hardship: ethical orientations of the Palestinian diaspora," International Journal of Ethics and Systems, Emerald Group Publishing Limited, vol. 36(4), pages 507-529, August.
    3. Benjamin Azembila Asunka & Zhiqiang Ma & Mingxing Li & Nelson Amowine & Oswin Aganda Anaba & Haoyang Xie & Weijun Hu, 2021. "Analysis of the causal effects of imports and foreign direct investments on indigenous innovation in developing countries," International Journal of Emerging Markets, Emerald Group Publishing Limited, vol. 17(5), pages 1315-1335, January.

    More about this item

    Keywords

    Globalization; Emerging markets; F21; F23;
    All these keywords.

    JEL classification:

    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business

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