Foreign Direct Investment of BRICS Countries

This study investigates the factors determining Foreign Direct Investment (FDI) inflows of BRICS countries using annual dataset from the period 1981 to 2012 (data set is required for Russia available from 1990 onwards). The study employs Panel data analysis and finds that the selected variables Market size, Trade openness, Human capital, Macro Economic stability, Infrastructure Quality, WTO Accession as the potential determinants of FDI inflows of BRICS countries. The Economic Stability and Growth forecast (measured by inflation rate and Industrial production respectively), Human capital is measured by the secondary school enrollment. 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.