Political environment and foreign direct investment: Evidence from OECD countries

Tomasz P. Wisniewski and Saima K. Pathan

European Journal of Political Economy, 2014, vol. 36, issue C, 13-23

Abstract: This paper examines the role that political factors play in the investment location decisions of multinational enterprises. It has been found that foreign direct investors shy away from countries with excessive government spending, especially when this spending is directed towards the military. They also seem to have a slight preference for leftist executives and be negatively predisposed toward situations in which the ruling party has held power for prolonged periods of time. Ceteris paribus, more FDI flows to countries that have presidential systems, established political parties and where the party of the executive controls all houses with lawmaking powers.

Keywords: Foreign direct investment; Political economy; MNEs; OECD (search for similar items in EconPapers)
JEL-codes: F21 F50 P16 (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (31)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:poleco:v:36:y:2014:i:c:p:13-23

DOI: 10.1016/j.ejpoleco.2014.07.004

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