An empirical investigation of FDI in flows in developing economies: Terrorism as a determinant factor
Date of Publication
2019 12:00 AM
Security Theme
Violent Extremism
Keywords
Violent Extremism, srhreports, violentextremism, foreign direct investment, developing economies, terrorism, panel data analysis
Description
The international allocation of capital flows is determined by various political, institutional, social and financial conditions. Recipient countries proceed to significant reforms in order to increase their attractiveness towards multinational companies and foreign investors. The purpose of the present paper is to empirically examine the determinant factors of foreign capitals in the developing economies with terrorist activity from 1970 to 2016, focusing on foreign direct investment (FDI) inflows. The sample of the study consists of 18 developing countries that present terrorist activity, of different geographic regions. Using FGLS in panel data the study concludes that terrorism is a deterrent factor of FDI and that both traditional and emerging determinants affect FDI inflows in the recipient countries. The contribution of the study refers to the fact that an extended econometric model of FDI is tested and presented. Suggestions for policymakers are presented.
An empirical investigation of FDI in flows in developing economies: Terrorism as a determinant factor
The international allocation of capital flows is determined by various political, institutional, social and financial conditions. Recipient countries proceed to significant reforms in order to increase their attractiveness towards multinational companies and foreign investors. The purpose of the present paper is to empirically examine the determinant factors of foreign capitals in the developing economies with terrorist activity from 1970 to 2016, focusing on foreign direct investment (FDI) inflows. The sample of the study consists of 18 developing countries that present terrorist activity, of different geographic regions. Using FGLS in panel data the study concludes that terrorism is a deterrent factor of FDI and that both traditional and emerging determinants affect FDI inflows in the recipient countries. The contribution of the study refers to the fact that an extended econometric model of FDI is tested and presented. Suggestions for policymakers are presented.
