THE ROLE OF GOVERNANCE ON INWARD FOREIGN DIRECT INVESTMENT IN DEVELOPING COUNTRIES
Abstract
Developing countries generally have poor governance infrastructure negatively affecting investment
climate. Since economic growth of host countries is another important factor affecting the foreign
direct investment decisions, the aim of the paper is to analyze the effect of governance infrastructure
and economic growth with other control variables on FDI inflows in developing countries and to
discuss policy implications to increase their FDI inflows. Since governance, FDI and growth are three
concepts that interact with each other according to the theoretical and empirical literature, System
GMM methodology is used to deal with endogeneity problem. It is found that improvements in
governance and higher GDP growth rate attract more FDI inflows in developing countries.
Keywords
References
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Details
Primary Language
Turkish
Subjects
Economics
Journal Section
Research Article
Publication Date
December 24, 2016
Submission Date
December 25, 2016
Acceptance Date
November 30, 2016
Published in Issue
Year 2016 Volume: 38 Number: 2
