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Economies 2017, 5(2), 17; doi:10.3390/economies5020017

Relationship between Institutional Factors and FDI Flows in Developing Countries: New Evidence from Dynamic Panel Estimation

Department of Economics, Hacettepe University, Çankaya, Ankara, 06800, Turkey
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Author to whom correspondence should be addressed.
Academic Editor: Eric Rougier
Received: 22 February 2017 / Revised: 10 May 2017 / Accepted: 23 May 2017 / Published: 30 May 2017
(This article belongs to the Special Issue FDI and Development: Emerging Issues)
View Full-Text   |   Download PDF [205 KB, uploaded 30 May 2017]

Abstract

In this paper, we revisit the relation between institutional factors and foreign direct investment (FDI) inflows in developing countries by employing a dynamic panel methodology, which enables us to deal with the persistency of FDI flows and endogeneity issues. We also contribute to the literature by using various measures of institutions to identify which aspects of institutional quality affect FDI in the developing world. Our empirical findings based on 113 developing countries over the period 2002–2012 show evidence that some institutional factors matter more than others in attracting more FDI flows. We also found that the financial crisis in 2008 and 2009 had a negative impact on FDI flows. View Full-Text
Keywords: institutions; foreign direct investment (FDI) flows; dynamic panel estimation; developing countries institutions; foreign direct investment (FDI) flows; dynamic panel estimation; developing countries
This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited. (CC BY 4.0).

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MDPI and ACS Style

Kurul, Z.; Yalta, A.Y. Relationship between Institutional Factors and FDI Flows in Developing Countries: New Evidence from Dynamic Panel Estimation. Economies 2017, 5, 17.

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