 Determinants of Foreign Direct Investment in Developing CountriesKhondoker Mottaleb () and Kaliappa Kalirajan () Margin: The Journal of Applied Economic Research, 2010, vol. 4, issue 4, 369-404 Abstract: By bridging the gap between domestic savings and investment and bringing the latest technology and management know-how from developed countries, foreign direct investment (FDI) can play an important role in achieving rapid economic growth in developing countries. Developing countries have not been considered as favourable destinations for FDI as developed countries. Moreover, among the developing countries a few, such as China, India, Nigeria and Sudan, are the major recipients of FDI, with the rest vying for the scraps. Using panel data from 68 low-income and lower-middle income developing countries, this article strives to identify the factors that determine FDI inflow to developing countries. Based on a comparative discussion focussing on why some countries are successful in attracting FDI, the article demonstrates that countries with larger GDPs, higher GDP growth rates, higher proportion of international trade and a more business-friendly environment are more successful in attracting FDI. Keywords: Foreign Direct Investment (FDI); Developing Country; Low-income Country; Lower-middle Income Country; JEL Classification: F21; JEL Classification: F23; JEL Classification: O40 (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:sae:mareco:v:4:y:2010:i:4:p:369-404 DOI: 10.1177/097380101000400401 Access Statistics for this article More articles in Margin: The Journal of Applied Economic Research from National Council of Applied Economic Research |
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