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Title:Membership has its privileges: The effect of membership in international organizations on FDI PDF Logo
Authors:Dreher, Axel
Mikosch, Heiner
Voigt, Stefan
Issue Date:2010
Series/Report no.:CESifo working paper: Fiscal Policy, Macroeconomics and Growth 3231
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.
Subjects:membership in international organizations
FDI
investment climate
political risk
signaling
separating equilibrium
JEL:F02
F21
H11
K33
P26
Document Type:Working Paper
Appears in Collections:CESifo Working Papers, CESifo Group Munich

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