Effect of quality of institutions on outward foreign direct investment
Article
Article Title | Effect of quality of institutions on outward foreign direct investment |
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ERA Journal ID | 18433 |
Article Category | Article |
Authors | Mishra, Anil (Author) and Daly, Kevin (Author) |
Journal Title | The Journal of International Trade and Economic Development: an international and comparative review |
Journal Citation | 16 (2), pp. 231-244 |
Number of Pages | 14 |
Year | 2007 |
Place of Publication | London, United Kingdom |
ISSN | 0963-8199 |
1469-9559 | |
Digital Object Identifier (DOI) | https://doi.org/10.1080/09638190701325573 |
Web Address (URL) | https://www.tandfonline.com/doi/abs/10.1080/09638190701325573 |
Abstract | In this paper we study the effect of quality of institutions in the OECD and Asian host countries on outward foreign direct investment (FDI) stocks of source OECD countries using International Country Risk Guide governance indicators, for the period 1991 to 2001. We find that better institutions in the host countries have an overall positive and significant effect on source countries outward FDI stocks. The strength and impartiality of the legal system, popular observance of law, strength and quality of bureaucracy and government stability in host countries’ have direct effect on source countries outward FDI stocks. Interestingly, trade changes sign and losses significance in two stage least squares regressions compared to theoretical expectation. Furthermore skill proxied by labour abundance in source countries relative to host countries appears to be insignificant in determining source countries’ outward FDI stock. |
Keywords | foreign direct investment; governance indicators; financial institutions |
ANZSRC Field of Research 2020 | 350208. Investment and risk management |
380110. International economics | |
350102. Auditing and accountability | |
Public Notes | File reproduced in accordance with the copyright policy of the publisher/author. |
Byline Affiliations | School of Accounting, Economics and Finance |
University of Western Sydney |
https://research.usq.edu.au/item/9y143/effect-of-quality-of-institutions-on-outward-foreign-direct-investment
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