Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/336390 
Year of Publication: 
2024
Citation: 
[Journal:] Latin American Journal of Central Banking (LAJCB) [ISSN:] 2666-1438 [Volume:] 5 [Issue:] 1 [Article No.:] 100120 [Year:] 2024 [Pages:] 1-25
Publisher: 
Elsevier, Amsterdam
Abstract: 
Emerging Market and Developing Economies (EMDE) countries are the leading destinations of Foreign Direct Investment (FDI). We investigate whether prudent monetary and fiscal policy through indicators that reflect the expectations concerning the central bank's commitment to a target and the sustainability of government finance affects FDI inflows. Based on a large sample of 75 EMDE countries from 1990 to 2019, we provide empirical evidence through panel data analysis that prudent macroeconomic policies are an essential driver of FDI inflows. The findings support the view that using prudent monetary and fiscal policy can help enhance FDI inflows in EMDE countries.
Subjects: 
Central bank credibility
Foreign direct investment
Inflation targeting
Macroeconomic stability
Public debt
Risk for budget balance
JEL: 
E63
F21
023
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by-nc-nd Logo
Document Type: 
Article

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