Economics at your fingertips  

Assessing the impact of fiscal transparency on FDI inflows

Lorenzo Cicatiello, Elina De Simone, Salvatore Ercolano and Giuseppe Lucio Gaeta

Socio-Economic Planning Sciences, 2021, vol. 73, issue C

Abstract: This paper analyzes the role of fiscal transparency as a determinant of foreign direct investment (FDI) attractiveness. It proposes an empirical test based on a panel regression analysis on data from 72 countries in the 2006–2015 time span. The evidence supports the idea that countries characterized by higher levels of budget openness attract more FDI inflows. In more detail, a higher degree of transparency during the phase of budget execution is associated with increases of FDI inflows, even when the sample is restricted to non-OECD countries and low and lower-middle-income countries. The positive effect is robust to several different specifications and is found to be additional to the one of general government transparency. Moreover, we also show that the role played by fiscal transparency in attracting FDI is independent of other close institutional determinants like control of corruption and regulatory quality.

Keywords: Fiscal transparency; Open budget index; Foreign direct investment (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link:

DOI: 10.1016/j.seps.2020.100892

Access Statistics for this article

Socio-Economic Planning Sciences is currently edited by Barnett R. Parker

More articles in Socio-Economic Planning Sciences from Elsevier
Bibliographic data for series maintained by Nithya Sathishkumar ().

Page updated 2021-03-27
Handle: RePEc:eee:soceps:v:73:y:2021:i:c:s0038012119305142