Foreign direct investment under uncertainty evidence from a large panel of countries

Caroline Jardet, Cristina Jude and Menzie Chinn

Review of International Economics, 2023, vol. 31, issue 3, 854-885

Abstract: We examine the effect of uncertainty on foreign direct investment inflows for advanced, emerging market and developing countries over a 25‐year long (pre‐Covid) sample. Using a push‐pull framework, and controlling for both global and local factors, we find policy uncertainty has discernable and significant effects on inflows, varying in strength and direction between different groups of countries. Moreover, it is not host country uncertainty that seems to matter the most, but rather global uncertainty. Additionally, we find that high levels of uncertainty matter disproportionately. Finally, financial openness accentuates the impact of uncertainty for emerging market and developing countries.

Date: 2023
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https://doi.org/10.1111/roie.12646

Related works:
Working Paper: Foreign direct investment under uncertainty evidence from a large panel of countries (2023)
Working Paper: Foreign Direct Investment under Uncertainty: Evidence from a Large Panel of Countries (2022)
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Persistent link: https://EconPapers.repec.org/RePEc:bla:reviec:v:31:y:2023:i:3:p:854-885

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