Emerging Economies’ Attraction of Foreign Direct Investment

33 Pages Posted: 14 Nov 2009 Last revised: 15 Mar 2012

See all articles by Alexander Peter Groh

Alexander Peter Groh

Luiss Guido Carli University - Luiss Business School; EMLYON Business School

Matthias Wich

affiliation not provided to SSRN

Date Written: March 28, 2012

Abstract

This paper uses a composite measure to examine why some countries attract more foreign direct investment (FDI) than others. The measure considers all identified, measurable, and comparable socioeconomic aspects that affect FDI decisions on an aggregated country level. As a result, we can rank 127 countries with respect to their FDI attraction. The measure allows detailed strength and weakness analyses and enhances the discussion of why FDI flows are concentrated in advanced economies. Additionally, the findings reveal the areas in which emerging countries should improve in order to narrow existing gaps. Our robustness checks indicate that the composite measure accurately tracks real FDI activity.

Keywords: FDI, Country Comparison, Composite Measure, Index, Emerging Markets

JEL Classification: F15, F21, F43, O16, O57, P52, R11

Suggested Citation

Groh, Alexander Peter and Wich, Matthias, Emerging Economies’ Attraction of Foreign Direct Investment (March 28, 2012). Available at SSRN: https://ssrn.com/abstract=1501082 or http://dx.doi.org/10.2139/ssrn.1501082

Alexander Peter Groh (Contact Author)

Luiss Guido Carli University - Luiss Business School ( email )

Via Nomentana, 216
Roma, 00162
Italy

EMLYON Business School ( email )

23 Avenue Guy de Collongue
Ecully, 69132
France

Matthias Wich

affiliation not provided to SSRN ( email )

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