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: 20 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 Appendix ......................................................................................................17