Determinants of FDI in BRICS Countries: A Panel Analysis

International Journal of Business Science and Applied Management, Vol. 5, Issue 3 (2010) 1-13

Posted: 26 Jun 2013

See all articles by Vijayakumar Narayanamoorthy

Vijayakumar Narayanamoorthy

PSG Institute of Management; Institute of Chartered Financial Analysts of India (ICFAI) - IBS - Hyderabad

Sridharan Perumal

Independent

K. Rao

Pondicherry University

Date Written: October 9, 2008

Abstract

This study examines the factors determining FDI inflows of BRICS countries using annual dataset from the period 1975 to 2007 (for Russia required data set is available from 1990 onwards). The study employs Panel data analysis and finds that the selected variables Market size, Labour cost, Infrastructure, Currency value and Gross Capital formation as the potential determinants of FDI inflows of BRICS countries. The Economic Stability and Growth prospects (measured by inflation rate and Industrial production respectively), Trade openness (measured by the ratio of total trade to GDP) are seems to be the insignificant determinant of FDI inflows of the BRICS countries. The empirical results are robust in general for alternative variables determining FDI flows.

Suggested Citation

N, Vijayakumar and Perumal, Sridharan and Rao, K., Determinants of FDI in BRICS Countries: A Panel Analysis (October 9, 2008). International Journal of Business Science and Applied Management, Vol. 5, Issue 3 (2010) 1-13, Available at SSRN: https://ssrn.com/abstract=2284678

Vijayakumar N (Contact Author)

PSG Institute of Management ( email )

Avinashi Road
Coimbatore, 600404
India

Institute of Chartered Financial Analysts of India (ICFAI) - IBS - Hyderabad ( email )

62, Nagarjuna Hill
Panjagutta
Hyderabad, TX AP 501504
India

Sridharan Perumal

Independent ( email )

K. Rao

Pondicherry University ( email )

Mahe Centre, Cemetery Road
Pondicherry
Pondicherry, PA Puducherry UT 605 014
India

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