The Quality of Institutions and Foreign Direct Investment
نویسندگان
چکیده
We study the role of the quality of institutions as a determinant of the location of FDI, using bilateral FDI stocks from OECD countries around the world. While the literature has placed special emphasis on the role of corruption on FDI, we explore a wider range of institutional aspects. We find that better institutions have overall a positive and significant effect on FDI. Especially, unpredictability of policies, excessive regulatory burden, deficient enforcement of property rights, and lack of commitment on the part of the government play a major role in deterring FDI flows. JEL Codes: F15, F23
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