Emerging economies' attraction of foreign direct investment

Alexander Peter Groh and Matthias Wich

Emerging Markets Review, 2012, vol. 13, issue 2, 210-229

Abstract: This paper uses a composite measure to examine why some countries attract more foreign direct investment (FDI) than others. The measure considers all identified, measurable, and comparable socioeconomic aspects that affect FDI decisions on an aggregated country level. As a result, we can rank 127 countries with respect to their FDI attraction. The measure allows detailed strength and weakness analyses and enhances the discussion of why FDI flows are concentrated in advanced economies. Additionally, the findings reveal the areas in which emerging countries should improve in order to narrow existing gaps. Our robustness checks indicate that the composite measure accurately tracks real FDI activity.

Keywords: FDI; Economic comparison; Emerging markets; Composite measure (search for similar items in EconPapers)
JEL-codes: F15 F21 F43 O16 O57 P52 R11 (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (22)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ememar:v:13:y:2012:i:2:p:210-229

DOI: 10.1016/j.ememar.2012.03.005

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