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Political governance, civil liberties, and human capital: Evaluating their effect on foreign direct investment in emerging and developing economies

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  • Fragkiskos Filippaios

    (University of Kent)

  • Fatima Annan-Diab

    (Kingston University)

  • Amir Hermidas

    (Credit Suisse)

  • Charikleia Theodoraki

    (University of Kent)

Abstract

We study the influence of a country’s political governance on its attractiveness to foreign direct investors. We argue that democracy is not a unidimensional concept and that the effect of host-country political governance on incoming foreign direct investment (FDI) differs depending on whether FDI originates from a democratic or an autocratic country. We also hypothesize that the effect of civil liberties depends on the motivations of investing multinational enterprises (MNEs) and that human capital moderates this relationship. We test our hypotheses on a sample of 35,000 investments in emerging and developing countries between 2003 and 2013.

Suggested Citation

  • Fragkiskos Filippaios & Fatima Annan-Diab & Amir Hermidas & Charikleia Theodoraki, 2019. "Political governance, civil liberties, and human capital: Evaluating their effect on foreign direct investment in emerging and developing economies," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 50(7), pages 1103-1129, September.
    • Handle: RePEc:pal:jintbs:v:50:y:2019:i:7:d:10.1057_s41267-019-00239-3
    DOI: 10.1057/s41267-019-00239-3
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