IDEAS home Printed from https://ideas.repec.org/a/jda/journl/vol.41year2007issue1pp143-154.html
   My bibliography  Save this article

Economic freedom and foreign direct investment in developing countries

Author

Listed:
  • Kapuria-Foreman, Vibha.

    (Colorado College, USA)

Abstract

This paper employs cross-country growth regressions for a sample of developing countries to examine the determinants of FDI. In addition to economic factors affecting foreign direct investment, the analysis also tests for the role of institutional quality (enforcement of property rights, corruption, etc.) and policy orientation factors (openness). The paper evaluates whether foreign investment responds to changes in levels of economic freedom. In addition it tests whether the insignificant coefficient found in previous studies is the result of the level of aggregation in the economic freedom data. Finally, it disaggregates the data on economic freedom and re-estimates the relationship between FDI and components of economic freedom. Foreign direct investment is found to vary positively with increases in certain components of economic freedom.

Suggested Citation

  • Kapuria-Foreman, Vibha., 2007. "Economic freedom and foreign direct investment in developing countries," Journal of Developing Areas, Tennessee State University, College of Business, vol. 41(1), pages 143-154, September.
    • Handle: RePEc:jda:journl:vol.41:year:2007:issue1:pp:143-154
    as

    Download full text from publisher

    File URL: http://muse.jhu.edu/journals/jda/summary/v041/41.1kapuria-foreman.html
    Download Restriction: no
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Qamri, Ghulam Muhammad & Sheng, Bin & Adeel-Farooq, Rana Muhammad & Alam, Gazi Mahabubul, 2022. "The criticality of FDI in Environmental Degradation through financial development and economic growth: Implications for promoting the green sector," Resources Policy, Elsevier, vol. 78(C).
    2. Mumtaz Hussain Shah, 2017. "Political Institutions and the Incidence of FDI in South Asia," Business & Economic Review, Institute of Management Sciences, Peshawar, Pakistan, vol. 9(1), pages 21-42, March.
    3. Ogbeifun Lawrence & Shobande Olatunji Abdul, 2020. "Causality Analysis of Disaggregated FDI Inflows on Sectorial Growth in OECD Area," Studia Universitatis „Vasile Goldis” Arad – Economics Series, Sciendo, vol. 30(4), pages 92-110, December.
    4. Jiménez, Alfredo & Delgado-García, Juan Bautista, 2012. "Proactive management of political risk and corporate performance: The case of Spanish multinational enterprises," International Business Review, Elsevier, vol. 21(6), pages 1029-1040.
    5. Fan Zhang & Joshua Hall & Feng Yao, 2018. "Does Economic Freedom Affect The Production Frontier? A Semiparametric Approach With Panel Data," Economic Inquiry, Western Economic Association International, vol. 56(2), pages 1380-1395, April.
    6. Tran, My Thi Ha, 2021. "Public Sector Management And Corruption In Asean Plus Six," OSF Preprints stxw4, Center for Open Science.
    7. Bartels, Frank L. & Napolitano, Francesco & Tissi, Nicola E., 2014. "FDI in Sub-Saharan Africa: A longitudinal perspective on location-specific factors (2003–2010)," International Business Review, Elsevier, vol. 23(3), pages 516-529.
    8. Burcu ŞENALP, 2018. "Foreign Direct Investment, Economic Growth and Economic Freedom: A Literature Survey," Istanbul Journal of Economics-Istanbul Iktisat Dergisi, Istanbul University, Faculty of Economics, vol. 68(2), pages 301-336, December.
    9. Brinda Sooreea-Bheemul & Uzma Shataz Rasool & Rajeev Sooreea, 2020. "Does Economic Freedom Matter to Foreign Direct Investment in Sub-Saharan Africa?," International Journal of Economics and Financial Issues, Econjournals, vol. 10(3), pages 195-207.
    10. John Anyanwu, 2011. "Working Paper 136 - Determinants of Foreign Direct Investment Inflows to Africa, 1980-2007," Working Paper Series 327, African Development Bank.
    11. Tea Kbiltsetskhlashvili, 2010. "Attracting Investors: Case of Impact of FDI on the Achievements of Economic Growth in Georgia," IBSU Scientific Journal, International Black Sea University, vol. 4(2), pages 35-51.
    12. Alfredo Jiménez & Juan Fuente & Juan Durán, 2011. "Is There an East-West Structure in the Location of FDI in Europe? The Role of Institutions and Political Risk," Research in Economics and Business: Central and Eastern Europe, Tallinn School of Economics and Business Administration, Tallinn University of Technology, vol. 3(1).
    13. Ceyhun Haydaroglu, 2016. "The Effect of Foreign Direct Investment and Economic Freedom on Economic Growth: The Case of BRICS Countries," Research in World Economy, Research in World Economy, Sciedu Press, vol. 7(1), pages 1-10, June.
    14. Turan Subasat & Sotirios Bellos, 2013. "Governance and foreign direct investment in Latin America: A panel gravity model approach," Latin American Journal of Economics-formerly Cuadernos de Economía, Instituto de Economía. Pontificia Universidad Católica de Chile., vol. 50(1), pages 107-131, May.
    15. Ahmed, Mohamed Abdelhameed & Faisal, Eid Naaimy, 2020. "Determinants Of Egyptian Arab Inter-Investments: Gravity Model Evidence," Academic Review of Humanities and Social Sciences, Bursa Teknik Üniversitesi, vol. 3(1), pages 161-178.
    16. Economou, Fotini, 2019. "Economic freedom and asymmetric crisis effects on FDI inflows: The case of four South European economies," Research in International Business and Finance, Elsevier, vol. 49(C), pages 114-126.
    17. Sadia IMTIAZ & Malik Fahim BASHIR, 2017. "Economic freedom and foreign direct investment in South Asian countries," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania / Editura Economica, vol. 0(2(611), S), pages 277-290, Summer.
    18. Jiménez, Alfredo & Luis-Rico, Isabel & Benito-Osorio, Diana, 2014. "The influence of political risk on the scope of internationalization of regulated companies: Insights from a Spanish sample," Journal of World Business, Elsevier, vol. 49(3), pages 301-311.
    19. John C. Anyanwu, 2012. "Why Does Foreign Direct Investment Go Where It Goes?: New Evidence From African Countries," Annals of Economics and Finance, Society for AEF, vol. 13(2), pages 425-462, November.
    20. Turan Subasat & Sotiris Bellos, 2011. "Economic Freedom and Foreign Direct Investment in Latin America: A Panel Gravity Model Approach," Economics Bulletin, AccessEcon, vol. 31(3), pages 2053-2065.
    21. Kazeem Bello AJIDE & P.B. EREGHA, 2014. "Economic Freedom And Foreign Direct Investment In Ecowas Countries: A Panel Data Analysis," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 14(2).
    22. Dobrota Gabriela, 2014. "The Evolution And Effects Of The Foreign Direct Investments In Romania," Annals - Economy Series, Constantin Brancusi University, Faculty of Economics, vol. 1, pages 97-102, February.
    23. Syed Toqueer Akhter & Fahad Manzoor, 2015. "Openness of Economy, Foreign Investment Inflows and the Phenomenon of Rent Seeking Corruption," Eurasian Journal of Economics and Finance, Eurasian Publications, vol. 3(3), pages 45-64.
    24. Xu, Tao, 2019. "Economic freedom and bilateral direct investment," Economic Modelling, Elsevier, vol. 78(C), pages 172-179.
    25. Magdalena Owczarczuk, 2013. "Property Rights As A Factor Of Foreign Direct Investment. The Case Of Poland," Oeconomia Copernicana, Institute of Economic Research, vol. 4(2), pages 97-116, June.

    More about this item

    Keywords

    Foreign Direct Investment; Economic Freedom; FDI;
    All these keywords.

    JEL classification:

    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:jda:journl:vol.41:year:2007:issue1:pp:143-154. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Abu N.M. Wahid (email available below). General contact details of provider: https://edirc.repec.org/data/cbtnsus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.