An econometric analysis of the determinants of foreign direct investment in developed and developing countries

Essay from the year 2010 in the subject Business economics - Investment and Finance, grade: 2,0, University of Exeter, language: English, abstract: Abstract

The objective of this study is to explore, through a cross-sectional econometric model, the factors of foreign direct investment (FDI) inflows in developed and developing countries over two periods 2005-2006. This work is based on cross-sectional data of 57 countries. In the model, FDI is dependent variable. Independent variables are per capita income, inflation rate, openness, per capita income growth rate, unemployment rate and dummy. According to the econometric results, in the main model, per capita income has positive sign and statistically significant. Inflation rate and unemployment rate present negative sign and are insignificant. Per capita income growth rate and openness have positive sign and both are not significant.

Table of Contents

Introduction 4

Literature Review 4

Theoretical Model 6

Data Collection .7

Methodology 7

Data Analysis and Interpretation 9

Conclusions and Recommendations 14

References 15

Bibliography 16

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