Foreign Direct Investment, Regulations and Growth

By M. Busse, José L. Groizard. 2006

217 citations recorded by the source corpus.

This paper explores the linkage between income growth rates and foreign direct investment (FDI) inflows. So far the evidence is rather mixed, as no robust relationship between FDI and income growth has been established. The authors argue that countries need a sound business environment in the form of good government regulations to be able to benefit from FDI. Using a comprehensive data set for regulations, they test this hypothesis and find evidence that excessive regulations restrict growth through FDI only in the most regulated economies. This result holds true for different specifications of the econometric model, including instrumental variable regressions.

Subfields: Economics and Econometrics, Finance, Strategy and Management

View Paper: https://www.semanticscholar.org/paper/999dfe99882b476d98f73687e07d23e51ef076a6

How researchers see this paper

The researchers whose trusted networks rank it highest, strongest advocate first. Every researcher gets a different order.

In Economics and Econometrics

1. Matteo Fiorini
2. Cosimo Beverelli
3. Bernard M. Hoekman
4. Dinuk Jayasuriya
5. Robert Gillanders
6. A. Corcoran

In Finance

1. Matteo Fiorini
2. Cosimo Beverelli
3. Bernard M. Hoekman
4. Dinuk Jayasuriya

In Strategy and Management

1. Matteo Fiorini
2. Cosimo Beverelli
3. Bernard M. Hoekman
4. Dinuk Jayasuriya
5. Robert Gillanders
6. A. Corcoran

Citations in the corpus

• Improvements in the World Bank's Ease of Doing Business Rankings: Do they Translate into Greater Foreign Direct Investment Inflows? (2011, methodology): “However, it contradicts the approach used by Busse and Groizard (2008) that only selects Doing Business indicators they believe are strongly related to FDI inflows.”
• Services trade policy and manufacturing productivity: The role of institutions (2017, background): “7 Macro evidence on the role of institutions as determinants of the effect of FDI on growth is presented by Busse and Groizard (2008) and Dort et al. (2014).”