Interaction of Economic Freedom and Foreign Direct Investment Globally: Special Cases from Neglected Regions

Yhlas Sovbetov and Mohamed Moussa ()
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Mohamed Moussa: Istanbul University

Journal of Economics and Financial Analysis, 2019, vol. 3, issue 2, 113-134

Abstract: This paper studies the macroeconomic impact of economic freedom on foreign direct investments inflows in both global and regional panel analyses involving 156 countries through the period of 1995-2016. Unlike to prior literature, it includes often neglected nations such as Fragile and Conflict-Affected states, Sub-Saharan, Oceanian, and Post-Soviet countries. The paper finds a positive impact of economic freedom on FDI under fixed-effects model in global case where a unit change in economic freedom scales FDI inflows up to 1.15 units. More specifically, all 9 regions also refer to positive and significant impact of economic freedom on FDI. The highest impact is recorded in European countries, whereas the lowest ones are documented in Fragile-Conflict affected states, Sub-Saharan zone, and Oceanian countries.

Keywords: Economic Freedom; Openness of Economy; Foreign Direct Investments; Neglected Regions; Panel Data Analysis. (search for similar items in EconPapers)
JEL-codes: C33 F00 F21 (search for similar items in EconPapers)
Date: 2019
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Persistent link: https://EconPapers.repec.org/RePEc:trp:01jefa:jefa0006

DOI: 10.1991/jefa.v1i1.a4

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