Developing inclusive economic institutions in South countries: The role of FDI

Assi Okara ()
Additional contact information
Assi Okara: CERDI - Centre d'Études et de Recherches sur le Développement International - UCA [2017-2020] - Université Clermont Auvergne [2017-2020] - CNRS - Centre National de la Recherche Scientifique

Working Papers from HAL

Abstract: Foreign Direct Investment (FDI) flows to developing economies have increased significantly over the last decades, bringing about important changes in the developing world. This paper is interested in the institutional aspect of these changes, a dimension weakly investigated in the development literature. More precisely, it explores the effects of FDI flows to developing economies on their economic institutions through a panel framework analysis. The results based on a large sample of developing countries over the period 1990-2009 show that total FDI (from developed and developing countries) have a positive impact on economic institutions. They also suggest that FDI flows from developed economies tend to favor inclusive economic institutions in developing countries while no clear evidence on an effect of flows from developing economies is found. Furthermore, the positive institutional impact of total FDI is mitigated in countries where the natural resources sector plays a prominent role in attracting FDI. Overall, the findings are robust to a series a robustness checks including the use of an alternative measure of economic institutions, the test of a delayed effect of FDI, the exclusion of outliers from the sample, and the test of any specific income group or regional effect.

Keywords: Economic institutions; FDI flows; Property rights; Natural resources; Development (search for similar items in EconPapers)
Date: 2018-07-20
Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-01845085
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://shs.hal.science/halshs-01845085/document (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:hal:wpaper:halshs-01845085

Access Statistics for this paper

More papers in Working Papers from HAL
Bibliographic data for series maintained by CCSD ().