FDI, Regulations and Growth

Konferenzbeitrag

The paper explores the linkage between income growth rates and foreign direct investment (FDI) inflows. So far the evidence is rather mixed, as no robust relationship between FDI and income growth has been established. We argue that countries need a sound business environment in the form of good government regulations to be able to benefit from FDI. Using a comprehensive data set for regulations, we test this hypothesis and find evidence that excessive regulations restrict growth through FDI only in the most regulated economies. This result holds true for different specifications of the econometric model, including instrumental variable regressions.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Proceedings of the German Development Economics Conference, Berlin 2006 ; No. 6

Classification and Topics

• Classification: Wirtschaft ; Economic Growth of Open Economies ; Economics of Regulation ; International Investment; Long-term Capital Movements ; Multiple or Simultaneous Equation Models: Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models
• Subject: Multinationals ; Spillovers ; Institutions ; Development

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Busse, Matthias ; Groizard Cardosa, José Luis
• Event: Veröffentlichung
• (who): Verein für Socialpolitik, Ausschuss für Entwicklungsländer
• (where): Hannover
• (when): 2006

Further information

• Handle: http://hdl.handle.net/10419/19834
• Last update: 10.03.2025, 11:44 AM CET