Determinants of Foreign Direct Investment

Bruce Blonigen and Jeremy Piger

No 16704, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Empirical studies of bilateral foreign direct investment (FDI) activity show substantial differences in specifications with little agreement on the set of covariates that are (or should be) included. We use Bayesian statistical techniques that allow one to select from a large set of candidates those variables most likely to be determinants of FDI activity. The variables with consistently high inclusion probabilities are traditional gravity variables, cultural distance factors, parent-country per capita GDP, relative labor endowments, and regional trade agreements. Variables with little support for inclusion are multilateral trade openness, host country business costs, host-country infrastructure (including credit markets), and host-country institutions. Of particular note, our results suggest that many covariates found significant by previous studies are not robust.

JEL-codes: C52 F21 F23 (search for similar items in EconPapers)
Date: 2011-01
New Economics Papers: this item is included in nep-ifn and nep-int
Note: ITI
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (96)

Published as Modeling Processor Market Power and the Incidence of Agricultural Policy: A Nonparametric Approach , Rachael E. Goodhue, Carlo Russo. in The Intended and Unintended Effects of US Agricultural and Biotechnology Policies , Graff Zivin and Perloff. 2012
Published as Bruce A. Blonigen & Jeremy Piger, 2014. "Determinants of foreign direct investment," Canadian Journal of Economics/Revue canadienne d'économique, vol 47(3), pages 775-812.

Downloads: (external link)
http://www.nber.org/papers/w16704.pdf (application/pdf)

Related works:
Journal Article: Determinants of foreign direct investment (2014)
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:nbr:nberwo:16704

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w16704

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by (wpc@nber.org).