An Impact Assessment of Expected Future Turmoil Risk on FDI: A Panel Data Analysis of Developing Countries

Mahvish Faran ()
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Mahvish Faran: Visiting faculty, Lahore School of Economics, Pakistan.

Lahore Journal of Economics, 2014, vol. 19, issue 2, 101-128

Abstract: This paper uses foreign direct investment (FDI) data from 39 developing countries for the period 2002–11 to explore whether the expected future turmoil risk of a country plays a significant role in determining FDI. It concludes that countries for which the expected future turmoil risk is very high are likely to have lower FDI inflows than countries for which the expected future turmoil risk is low, keeping all other factors constant. The results also illustrate that GDP per capita, democratic accountability, religious tension, and FDI inflows in the previous period are important determinants of FDI in developing countries.

Keywords: Political risk; foreign direct investment; expected future turmoil risk. (search for similar items in EconPapers)
JEL-codes: C23 C33 F21 F23 (search for similar items in EconPapers)
Date: 2014
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Persistent link: https://EconPapers.repec.org/RePEc:lje:journl:v:19:y:2014:i:2:p:101-128

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