Financial development and FDI inflows: amplifying effect of bilateral political relations

Jun Shen, Bin Wang and Kai Zhao

Applied Economics Letters, 2024, vol. 31, issue 5, 390-394

Abstract: This study investigates the effects of financial development of foreign direct investment (FDI) target countries on FDI inflows, with a focus on how bilateral political relations change the effects through evidence from China. Results show that (1) FDI target countries’ financial development significantly increases FDI inflows from China; (2) Bilateral political relations significantly amplify the effects of destination countries’ financial development on FDI inflows from China.

Date: 2024
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DOI: 10.1080/13504851.2022.2136356

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