Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/19287
Authors: 
Hefeker, Carsten
Busse, Matthias
Year of Publication: 
2005
Series/Report no.: 
HWWA Discussion Paper 315
Abstract: 
The paper explores the linkages between political risk, institutions and foreign direct investment inflows. Using different econometric techniques for a data sample of 83 developing countries and the period 1984 to 2003, we identify those indicators that matter most for the activities of multinational corporations. Overall, 12 different indicators for political risk and institutions are employed in the empirical analysis. The results show that government stability, the absence of internal conflict and ethnic tensions, basic democratic rights and ensuring law and order are highly significant determinants of foreign investment inflows.
Subjects: 
Political Risk
Institutions
FDI
Multinational Corporations
JEL: 
C31
F21
F23
C33
Document Type: 
Working Paper

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