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Determinants of foreign direct investment

Bruce Blonigen and Jeremy Piger

Canadian Journal of Economics, 2014, vol. 47, issue 3, 775-812

Abstract: Empirical studies of bilateral foreign direct investment (FDI) activity show substantial differences in specifications with little agreement on the set of included covariates. We use Bayesian statistical techniques that allow one to select from a large set of candidates those variables most likely to be determinants of FDI activity. The variables with consistently high inclusion probabilities include traditional gravity variables, cultural distance factors, relative labour endowments and trade agreements. There is little support for multilateral trade openness, most hostcountry business costs, hostcountry infrastructure and hostcountry institutions. Our results suggest that many covariates found significant by previous studies are not robust.

JEL-codes: C52 F21 F23 (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (215)

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Related works:
Chapter: Determinants of Foreign Direct Investment (2019) Downloads
Journal Article: Determinants of foreign direct investment (2014) Downloads
Working Paper: Determinants of Foreign Direct Investment (2011) Downloads
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