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Do Civil and Political Repression Really Boost Foreign Direct Investments?

Philipp Harms and Heinrich Ursprung

No 421, CESifo Working Paper Series from CESifo

Abstract: Multinational enterprises are often accused to have a preference for investing in countries in which the working populations' civil and political rights are largely disregarded. This paper presents an empirical investigation of the popular "political repression boosts FDI" hypothesis and arrives at the conclusion that the hypothesis is not supported. On the contrary, multinational enterprises rather appear to be attracted by countries in which civil and political freedom is respected. Our finding thus supports the notion that there is a positive relationship between democracy and economic growth.

Keywords: Foreign direct investment; globalization; globalisation; democracy; freedom (search for similar items in EconPapers)
Date: 2001
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Journal Article: Do Civil and Political Repression Really Boost Foreign Direct Investments? (2002)
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