Determinants of FDI inflows to developing countries: a panel data analysis

Ab Quyoom Khachoo

MPRA Paper from University Library of Munich, Germany

Abstract: The aim of this paper is to identify, by estimating a panel econometric model, the factors determining FDI inflows to developing countries over a long period. The study is based on a sample of 32 developing countries. In our analysis, FDI inflows are modeled as a function of the market size, total reserves, infrastructure, labour cost and degree of openness for the host countries. Using data from 1982 to 2008, a panel data estimator suggests that the market size, total reserves, infrastructure and labour costs are the main determinants of FDI inflows to developing countries.

Keywords: FDI Inflows; Fully Modified Ordinary Least Squares (FMOLS); Pedroni’s Panel Cointegration Methodology; Developing Countries (search for similar items in EconPapers)
JEL-codes: C23 F21 F23 (search for similar items in EconPapers)
Date: 2012-02
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Citations: View citations in EconPapers (17)

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