Improvements in the World Bank's Ease of Doing Business Rankings: Do they Translate into Greater Foreign Direct Investment Inflows?
By Dinuk Jayasuriya. 2011
132 citations recorded by the source corpus.
The World Bank's Ease of Doing Business reports have been ranking countries since 2006. However, do improvements in rankings generate greater foreign direct investment inflows? This study is the first to test such a proposition empirically with Arellano-Bond dynamic panel estimators using the official rankings from 2006 to 2009. The paper shows this relationship is significant for the average country. However, when the sample is restricted to developing countries, the results suggest an improved ranking has, on average, an insignificant (albeit positive) influence on foreign direct investment inflows. Although robust, this result should be taken with caution given that it refers to the average developing country using data across a four-year time period. Finally, the paper demonstrates that, on average, countries that undertake large-scale reforms relative to other countries do not necessarily attract greater foreign direct investment inflows. This analysis may have important ramifications for developing country governments wanting to improve their Doing Business Rankings in the hope of attracting foreign direct investment inflows.
Subfields: Development, Economics and Econometrics, Strategy and Management
View Paper: https://www.semanticscholar.org/paper/a4a91fcc158250fb22cd869318db83f3ba3e1582
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In Development
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Citations in the corpus
- Foreign direct investment and the ease of doing business (2015, methodology): “Lawless (2009) finds that the tax complexity components of doing business have a significant effect on the existence of FDI but little effect on the level.”
- The Power of Ranking: The Ease of Doing Business Indicator and Global Regulatory Behavior (2019, unknown): “Jayasuriya 2011.”