FDI from the South: the Role of Institutional Distance and Natural Resources

Mariya Aleksynska and Olena Havrylchyk

Working Papers from CEPII research center

Abstract: This study explores location choices for investors stemming from emerging economies (often referred to as the South), with a particular emphasis on institutions and natural resources. Relying on a novel dataset of bilateral FDI flows between 1996 and 2007, we demonstrate that FDI from the South has a more regional aspect than investment stemming from the North. Institutional distance has an asymmetric effect on FDI depending on whether investors choose countries with better or worse institutions. In the latter case, a large institutional distance between source and destination countries discourages FDI inflows, but the growing attractiveness of the primary sector outweighs this deterring effect for emerging investors. We also attest to the complementary relationship between capital flows from the North and South in developing recipient countries, which we attribute to different FDI patterns of these investors.

Keywords: Foreign direct investment; South-South; developing countries; institutions; crowding-in; natural resources (search for similar items in EconPapers)
JEL-codes: E02 F21 F23 (search for similar items in EconPapers)
Date: 2011-03
New Economics Papers: this item is included in nep-ifn and nep-int
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

Downloads: (external link)
http://www.cepii.fr/PDF_PUB/wp/2011/wp2011-05.pdf (application/pdf)

Related works:
Journal Article: FDI from the south: The role of institutional distance and natural resources (2013)
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: https://EconPapers.repec.org/RePEc:cii:cepidt:2011-05

Access Statistics for this paper

More papers in Working Papers from CEPII research center Contact information at EDIRC.
Bibliographic data for series maintained by ().