Economic freedom and foreign direct investment: Are they related?

2022 ◽  
Author(s):  
Mehmet Nasih Tag ◽  
Suleyman Degirmen
Keyword(s):  
Foreign Direct Investment ◽  
Direct Investment ◽  
Economic Freedom

scholarly journals Foreign Direct Investment, Economic Freedom and Economic Growth: Evidence from Developing Countries

2016 ◽  
Vol 8 (11) ◽  
pp. 200 ◽  
Author(s):  
Md. Shakib Hossain
Keyword(s):  
Economic Growth ◽  
Developing Countries ◽  
Foreign Direct Investment ◽  
Standard Deviation ◽  
Poisson Regression ◽  
Direct Investment ◽  
Economic Freedom ◽  
Random Effect ◽  
Estimating Equation ◽  
Generalized Estimating Equation

<p class="Default">This paper has explores the interplay between economic freedom, foreign direct investment and economic growth using panel data analysis for a sample of 79 developing countries from 1998 to 2014 by considering the level of economic freedom, as provided by the “Heritage Foundation”. Panel unit root, pedroni residual co-integration test, generalized least square (GLS), feasible GLS (FGLS), pooled OLS, random effect, fixed effect, poisson regression, prais-winsten, generalized method of movement (GMM) and generalized estimating equation (GEE) methods have used to estimates the relationship. According to the OLS and generalized method of movement the coefficient implies that a one standard deviation improvement in business freedom, trade freedom, size, investment freedom, property rights, freedom from corruption, labor freedom, financial freedom, fiscal freedom, monetary freedom increases FDI by 21.4%, 15.6%, 21.6%, 17.5%, 11.55, 9.1%, 6.9%, 8.5%, 7.4%, 10.3% and 56.1%, 45.3%, 58.3%, 51.6%, 33.7%, 39.2%, 47.4%, 41.6%, 32.5%, 38.5% points respectively and  for the economic variable ,the coefficient implies that a one standard deviation improvement in GDPG and GDPPC increases FDI by 24.1%, 17.4% and 30.2%, 33.4% points respectively. By using the other method like random effect, fixed effect, poisson regression, prais-winsten and generalized estimating equation (GEE) method explores that economic freedom in the host country is a positive determinants of FDI inflows in developing countries and also the result suggests that foreign direct investment is positively correlated with the economic growth in the host countries.</p>

scholarly journals Foreign Direct Investment, Natural Resources, Economic Freedom, and Sea-Access: Evidence from the Commonwealth of Independent States

2020 ◽  
Vol 12 (8) ◽  
pp. 3135 ◽  
Author(s):  
Wencong Lu ◽  
Ikboljon Kasimov ◽  
Ibrokhim Karimov ◽  
Yakhyobek Abdullaev
Keyword(s):  
Foreign Direct Investment ◽  
Natural Resources ◽  
Least Squares ◽  
Random Effects ◽  
Direct Investment ◽  
Economic Freedom ◽  
Generalized Least Squares ◽  
Standard Errors ◽  
Fdi Inflows ◽  
Independent States

This study examines the importance of natural resources, economic freedom, and sea-access in attracting foreign direct investment (FDI) inflows to the Commonwealth of Independent States (CIS), using panel data from 1998 to 2017. The Prais-Winsten regression with panel-corrected standard errors (PCSEs) is employed for all estimations. Feasible Generalized Least Squares (FGLS), Random Effects with Driscoll-Kraay standard errors (RE (D-K)), and Random Effects of Generalized Least Squares (RE (GLS)) estimators are used to test the sensitivity of PCSEs’ estimates to changes in the underlying empirical model, whereas Instrumental Variables with Two Stage Least Squares (IV (2SLS)), Limited Information Maximum Likelihood (LIML), and Baltagi’s Two-Stage Least-Squares Random-Effects (IV (EC2SLS)) estimators are used to address potential endogeneity concerns. The estimates confirm that natural resources, economic freedom, and sea-access are robust and decisive factors affecting FDI location decisions of foreign investors in CIS. More precisely, the results suggest that increased revealed comparative advantage in petroleum, higher economic freedom characterized by the increased government size and open markets, and territorial coastlines have a statistically significant and positive effect on FDI inflows to CIS transition economies. We also find that direct access to the Black Sea and the Caspian Sea provides a significant geographic competitive advantage to Azerbaijan, Kazakhstan, Georgia, Russia, Turkmenistan, and Ukraine in attracting FDI inflows over the other CIS member-states.

Foreign direct investment in countries of the former Soviet Union: Relationship to governance, economic freedom and corruption perception

2008 ◽  
Vol 41 (3) ◽  
pp. 301-316 ◽  
Author(s):  
Murat M. Kenisarin ◽  
Philip Andrews-Speed
Keyword(s):  
Foreign Direct Investment ◽  
Soviet Union ◽  
Market Economy ◽  
Former Soviet Union ◽  
Direct Investment ◽  
Economic Freedom ◽  
Significant Extent ◽  
Planned Economy ◽  
Corruption Perception ◽  
Per Capita

The modernisation of the economies of the former Soviet Union (FSU) will require substantial levels of foreign direct investment (FDI). The aim of this study is to examine factors which may be instrumental in determining this level of the FDI. It achieves this by establishing quantitative relationships between levels of FDI per capita to the year 2004 and three sets of indicators relating, respectively, to governance, economic freedom, and corruption perception. The paper demonstrates that the level of FDI in FSU states has been determined to a significant extent by the degree of reform from a planned economy towards a market economy.

scholarly journals Corrigendum

2014 ◽  
Vol 40 (7) ◽  
pp. 2033-2033
Keyword(s):  
Foreign Direct Investment ◽  
Direct Investment ◽  
Economic Freedom ◽  
Informal Institutions ◽  
Formal Institutions ◽  
Heritage Foundation ◽  
The World ◽  
Inward Foreign Direct Investment

Holmes, R. M., Miller, T., Hitt, M. A., & Salmador, M. P. 2013. The interrelationships among informal institutions, formal institutions, and inward foreign direct investment. Journal of Management, 39: 531-566. Original DOI: 10.1177/0149206310393503 . In this article in the February 2013 issue of Journal of Management, Table 4 had errors. The corrected table appears below. [Table: see text] Also in this article, the authors cited Gwartney, Lawson, and Block (1996) when referencing the Index of Economic Freedom, whereas Gwartney et al. (1996) published the Economic Freedom of the World; the Heritage Foundation publishes the Index of Economic Freedom. The authors apologize for these errors, which were unintentional.

scholarly journals Economic Freedom, Macroeconomic Fundamentals and Foreign Direct Investment in Fast Emerging Brics and Malaysia

2013 ◽  
Author(s):  
Catherina S.F. Ho ◽  
Noryati Ahmad ◽  
Hayati Mohd Dahan
Keyword(s):  
Foreign Direct Investment ◽  
Direct Investment ◽  
Economic Freedom ◽  
Trade Openness ◽  
Emerging Countries ◽  
Policy Implications ◽  
Foreign Direct Investments ◽  
Critical Factors ◽  
Major Factors ◽  
Country Specific

This study investigates the major factors that determine the inflow of foreign direct investment (FDI) into fast emerging countries: Brazil, China, India, Russia, South Africa (BRICS) and Malaysia. Two sets of factors are identified: macroeconomic and country specific fundamentals. The period of analysis is 1977-2010. The study provides empirical evidence that economic growth, government consumption and trade openness are vital for FDI. In addition, country specific infrastructure quality and economic freedom are also critical factors in determining FDI for this group of countries. Our findings have significant policy implications for the growth and development of these countries, particularly through foreign direct investments.  

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