The impact of civil war on foreign direct investment flows to developing countries
Chengchun Li,
Syed Mansoob Murshed and
Sailesh Tanna
The Journal of International Trade & Economic Development, 2017, vol. 26, issue 4, 488-507
Abstract:
We investigate the impact of civil war on foreign direct investment (FDI) flows to developing countries. We employ a new data-set that disaggregates FDI inflows to primary, secondary and tertiary sectors. Second, we control for a richer set of economic and institutional variables that could determine FDI inflows including population, gross domestic product (GDP) per capita, the degree of trade openness, exchange rate variability, inflation, the governance structure of the host country using International Country Risk Guide data and its regime type using the POLITY autocracy–democracy data. We also address the reverse causality between FDI and conflict and the potential endogeneity of explanatory variables by employing dynamic system generalised method of moments (GMM) techniques in estimation. Our results indicate that primary sector FDI flows to developing countries are not significantly affected by civil war, whereas secondary and tertiary sectors FDI are more sensitive to such outbreak, potentially leading to reversals of existing FDI. Among institutional variables, government stability and control of corruption are more significant compared to regime type, law and order, and bureaucratic quality.
Date: 2017
References: Add references at CitEc
Citations: View citations in EconPapers (26)
Downloads: (external link)
http://hdl.handle.net/10.1080/09638199.2016.1270347 (text/html)
Access to full text is restricted to subscribers.
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:taf:jitecd:v:26:y:2017:i:4:p:488-507
Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/RJTE20
DOI: 10.1080/09638199.2016.1270347
Access Statistics for this article
The Journal of International Trade & Economic Development is currently edited by Pasquale Sgro, David E.A. Giles and Charles van Marrewijk
More articles in The Journal of International Trade & Economic Development from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst (chris.longhurst@tandf.co.uk).