TY - JOUR
T1 - Determinants of Foreign Direct Investment in Developing Countries: A Comparative Analysis
AU - Mottaleb, Khondoker
AU - Kalirajan, Kaliappa
PY - 2010
Y1 - 2010
N2 - By bridging the gap between domestic savings and investment and bringing the latest technology and management know-how from developed countries, foreign direct investment (FDI) can play an important role in achieving rapid economic growth in developing countries. Developing countries have not been considered as favourable destinations for FDI as developed countries. Moreover, among the developing countries a few, such as China, India, Nigeria and Sudan, are the major recipients of FDI, with the rest vying for the scraps. Using panel data from 68 low-income and lower-middle income developing countries, this article strives to identify the factors that determine FDI infl ow to developing countries. Based on a comparative discussion focussing on why some countries are successful in attracting FDI, the article demonstrates that countries with larger GDPs, higher GDP growth rates, higher proportion of international trade and a more business-friendly environment are more successful in attracting FDI.
AB - By bridging the gap between domestic savings and investment and bringing the latest technology and management know-how from developed countries, foreign direct investment (FDI) can play an important role in achieving rapid economic growth in developing countries. Developing countries have not been considered as favourable destinations for FDI as developed countries. Moreover, among the developing countries a few, such as China, India, Nigeria and Sudan, are the major recipients of FDI, with the rest vying for the scraps. Using panel data from 68 low-income and lower-middle income developing countries, this article strives to identify the factors that determine FDI infl ow to developing countries. Based on a comparative discussion focussing on why some countries are successful in attracting FDI, the article demonstrates that countries with larger GDPs, higher GDP growth rates, higher proportion of international trade and a more business-friendly environment are more successful in attracting FDI.
U2 - 10.1177/097380101000400401
DO - 10.1177/097380101000400401
M3 - Article
VL - 4
SP - 369
EP - 404
JO - Margin: The Journal of Applied Economic Research
JF - Margin: The Journal of Applied Economic Research
IS - 4
ER -