Foreign Direct Investment and The Ease of Doing Business

Files in This Item:
File Description SizeFormat 
WP12_19.pdf2.02 MBAdobe PDFDownload
Title: Foreign Direct Investment and The Ease of Doing Business
Authors: Corcoran, Adrian
Gillanders, Robert
Permanent link: http://hdl.handle.net/10197/3777
Date: Jul-2012
Abstract: This paper examines the effect that a country’s business regulatory environment has on the amount of foreign direct investment it attracts. We use the World Bank’s Ease of Doing Business ranking to capture the costs that firms face when operating in a country. Several interesting results emerge. Firstly, the Doing Business rank is highly significant when included in a standard empirical FDI model estimated on data averaged over the period 2004-2009. Secondly, the significance of the overall Doing Business is driven by the Ease of Trading Across Borders component. We argue that this is a more intuitively appealing proxy for trade costs than the often used openness variable. The relationship does not seem to exist for the World’s poorest region, Sub-Saharan Africa, or for the OECD. Finally, we find no evidence that the ease of doing business of nearby countries has an effect on the FDI that a country gets in general. However, in terms of attracting FDI from the US, it helps to be near countries with good trade regulation and bad regulation in other respects.
Funding Details: Not applicable
Type of material: Working Paper
Publisher: University College Dublin. School of Economics
Keywords: Foreign direct investment;Business regulation
Subject LCSH: Investments, Foreign
Trade regulation
Language: en
Status of Item: Not peer reviewed
Appears in Collections:Economics Working Papers & Policy Papers

Show full item record

Page view(s) 5

313
checked on May 25, 2018

Download(s) 10

847
checked on May 25, 2018

Google ScholarTM

Check


This item is available under the Attribution-NonCommercial-NoDerivs 3.0 Ireland. No item may be reproduced for commercial purposes. For other possible restrictions on use please refer to the publisher's URL where this is made available, or to notes contained in the item itself. Other terms may apply.