Foreign Direct Investment

International Monetary Fund

No 1990/063, IMF Working Papers from International Monetary Fund

Abstract: This paper summarizes the theory and empirical evidence on the determinants of foreign direct investment. These determinants include expected relative rates of return, risk diversification, market size, technological advantage, market failure, oligopolistic rivalry, liquidity, currency strength, political instability, tax policy, and government regulations. While most explanations of foreign direct investment receive some empirical support, there is not sufficient favorable evidence on any one of them to merit rejection of all the others.

Keywords: WP; point of view; parent firm; currency firm; intra-firm price; firms from country; Foreign direct investment; Transnational corporations; Foreign corporations; Currencies; Capital flows; Europe; Global (search for similar items in EconPapers)
Pages: 32
Date: 1990-01-01
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Citations: View citations in EconPapers (12)

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