Membership has its privileges: The effect of membership in international organizations on FDI

Axel Dreher, Heiner Mikosch and Stefan Voigt

No 114, University of Göttingen Working Papers in Economics from University of Goettingen, Department of Economics

Abstract: We argue that membership in International Organizations (IOs) is an important determinant of FDI inflows. To the extent that membership restricts a country from pursuing policies that are harmful to investors, it can signal low political risk. Using data over the 1971-2005 period, we find that membership in IOs does indeed increase inflows of FDI. Controlling for the endogeneity of membership, we find this effect to be substantively important and robust to the method of estimation.

Keywords: Membership in International Organizations; FDI; Investment Climate; Political Risk; Signaling; Separating Equilibrium (search for similar items in EconPapers)
JEL-codes: F02 F21 H11 K33 P26 (search for similar items in EconPapers)
Date: 2010
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Citations: View citations in EconPapers (6)

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Related works:
Journal Article: Membership has its Privileges – The Effect of Membership in International Organizations on FDI (2015)
Working Paper: Membership has its Privileges - The Effect of Membership in International Organizations on FDI (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:cegedp:114

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