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Trust and Foreign Direct Investment: An Empirical Analysis

Author

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  • Bohdan Kukharskyy

Abstract

This paper studies the relationship between trust and foreign direct investment (FDI) in a crosssection of countries. Accounting for the issue endogeneity, this paper suggests that countries with a higher level of generalized trust attract more FDI than the low-trust countries.

Suggested Citation

  • Bohdan Kukharskyy, 2012. "Trust and Foreign Direct Investment: An Empirical Analysis," Working Papers 127, Bavarian Graduate Program in Economics (BGPE).
    • Handle: RePEc:bav:wpaper:127_kukharskyy
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    File URL: https://bgpe.cms.rrze.uni-erlangen.de/files/2023/07/127_Trust-and-Foreign-Direct-Investment-An-Empirical-Analysis.pdf
    File Function: First version, 2012
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    References listed on IDEAS

    as
    1. La Porta, Rafael, et al, 1997. "Trust in Large Organizations," American Economic Review, American Economic Association, vol. 87(2), pages 333-338, May.
    2. Stephen Knack & Philip Keefer, 1997. "Does Social Capital Have an Economic Payoff? A Cross-Country Investigation," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 112(4), pages 1251-1288.
    3. Yann Algan & Pierre Cahuc, 2010. "Inherited Trust and Growth," American Economic Review, American Economic Association, vol. 100(5), pages 2060-2092, December.
    4. Luigi Guiso & Paola Sapienza & Luigi Zingales, 2009. "Cultural Biases in Economic Exchange?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 124(3), pages 1095-1131.
    5. Guiso, Luigi & Zingales, Luigi & Sapienza, Paola, 2010. "Civic Capital as the Missing Link," CEPR Discussion Papers 7757, C.E.P.R. Discussion Papers.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Trust; Foreign Direct Investment; Causality;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements

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