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Foreign direct investment and the ease of doing business
Corcoran, Adrian; Gillanders, Robert
This paper examines the effect that a country’s business regulatory environment has on the amount of foreign direct investment it attracts. We use the World Bank’s Ease of Doing Business ranking to capture the costs that firms face when operating in a country. Several interesting results emerge. Firstly, the Doing Business rank is highly significant when included in a standard empirical FDI model estimated on data averaged over the period 2004-2009. Secondly, the significance of the overall Doing Business is driven by the Ease of Trading Across Borders component. Thirdly, the relationship is significant for middle income countries, but not for the World’s poorest region, SubSaharan Africa, or for the OECD. Finally, we find no evidence that the ease of doing business of nearby countries has an effect on the FDI that a country gets in general.
Keyword(s): Economics; Foreign Direct Investment; Business Regulation
Publication Date:
2014
Type: Journal article
Peer-Reviewed: Yes
Language(s): English
Institution: Dublin City University
Citation(s): Corcoran, Adrian and Gillanders, Robert (2014) Foreign direct investment and the ease of doing business. Review of World Economics, 151 (1). pp. 103-126. ISSN 1610-2878
Publisher(s): Springer
File Format(s): application/pdf
Related Link(s): http://doras.dcu.ie/22332/1/FDI_and_Ease_of_Doing_Business.pdf
First Indexed: 2018-04-20 06:05:09 Last Updated: 2018-04-20 06:05:09