Revisiting the relationship between governance and foreign direct investment

Pierre-Guillaume Méon and Khalid Sekkat

Brussels Economic Review, 2007, vol. 50, issue 1, 41-61

Abstract: Using a sample of 96 countries over the nineties, this paper examines the extent to which different dimensions of governance affect FDI inflows. It considers six aspects of governance. The results of a least-squares estimation suggest a positive relationship between institutional quality and FDI. However, when the issue of the endogeneity of governance is tackled thanks to 2SLS regressions, the relationship appears much weaker.

Keywords: Institutions; governance; foreign direct investment (search for similar items in EconPapers)
JEL-codes: C33 F21 F41 O17 (search for similar items in EconPapers)
Date: 2007
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Citations: View citations in EconPapers (14)

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