Foreign Direct Investment, Regulations, and Growth

This paper explores the linkage between income growth rates and foreign direct investment (FDI) inflows. So far the evidence is rather mixed, as no robust relationship between FDI and income growth has been established. The authors argue that countries need a sound business environment in the form o...

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Main Authors:	Busse, Matthias, Groizard, José Luis
Format:	Policy Research Working Paper
Language:	English
Published:	World Bank, Washington, DC 2012
Subjects:	BANKRUPTCY BASE YEAR BENCHMARK BLACK MARKET BLACK MARKET PREMIUM BUSINESS REGULATIONS CAPITAL FLOWS CIVIL LIBERTIES COMPETITIVENESS COUNTRY CHARACTERISTICS COUNTRY REGRESSIONS DEPENDENT VARIABLE DESCRIPTIVE STATISTICS DEVELOPING COUNTRIES DEVELOPMENT ECONOMICS DIRECT INVESTMENT INFLOWS DOMESTIC FIRMS DYNAMIC PANEL ECONOMIC ANALYSIS ECONOMIC BENEFITS ECONOMIC DEVELOPMENT ECONOMIC GROWTH ECONOMIC INTEGRATION ECONOMICS ECONOMICS RESEARCH EDUCATIONAL ATTAINMENT EMPIRICAL LITERATURE EMPIRICAL RESULTS EMPIRICAL STUDIES EMPIRICAL WORK ENDOGENOUS VARIABLES ERROR TERM ESTIMATED COEFFICIENT EXOGENOUS VARIABLES EXPLANATORY VARIABLES EXPORTS FACTOR ENDOWMENTS FDI FINANCIAL MARKET FINANCIAL MARKETS FINANCIAL SYSTEMS FOREIGN CAPITAL FOREIGN CURRENCY FOREIGN DIRECT INVESTMENT FOREIGN INVESTMENT FOREIGN INVESTMENTS FRAMEWORK FOR REGULATIONS GDP GDP PER CAPITA GOVERNMENT REGULATIONS GROSS DOMESTIC PRODUCT GROWTH EQUATION GROWTH LITERATURE GROWTH RATE GROWTH RATES GROWTH REGRESSION HOST COUNTRIES HOST COUNTRY HOST ECONOMIES HOST ECONOMY HUMAN CAPITAL IMPACT OF REGULATIONS INCOME GROWTH INCOME LEVELS INDEPENDENT VARIABLES INDUSTRIAL ECONOMICS INFLATION RATE INTERNATIONAL ECONOMICS INTERNATIONAL TRADE INVESTMENT DECISIONS LABOR MARKET LAGGED GROWTH LANDLOCKED COUNTRIES LIQUIDITY MIDDLE EAST MODEL SPECIFICATIONS MONETARY ECONOMICS MULTINATIONAL COMPANIES MULTINATIONAL ENTERPRISES NEGATIVE SIGN NORTH AFRICA 0 HYPOTHESIS PER CAPITA GROWTH PER CAPITA INCOME POLICY IMPLICATIONS POLICY RESEARCH POSITIVE EFFECTS PRODUCTIVITY GROWTH PRODUCTIVITY INCREASES QUALITY REGULATIONS REGRESSION ANALYSIS REGULATORY COSTS REGULATORY ENVIRONMENT REGULATORY FRAMEWORK SIGNIFICANT IMPACT STANDARD DEVIATION SUB-SAHARAN AFRICA TECHNOLOGY SPILLOVERS TRADE LIBERALIZATION VERTICAL LINKAGES
Online Access:	http://documents.worldbank.org/curated/en/2006/04/6727744/foreign-direct-investment-regulations-growth http://hdl.handle.net/10986/8728

id	okr-10986-8728
recordtype	oai_dc
spelling	okr-10986-87282021-04-23T14:02:40Z Foreign Direct Investment, Regulations, and Growth Busse, Matthias Groizard, José Luis BANKRUPTCY BASE YEAR BENCHMARK BLACK MARKET BLACK MARKET PREMIUM BUSINESS REGULATIONS CAPITAL FLOWS CIVIL LIBERTIES COMPETITIVENESS COUNTRY CHARACTERISTICS COUNTRY REGRESSIONS DEPENDENT VARIABLE DESCRIPTIVE STATISTICS DEVELOPING COUNTRIES DEVELOPMENT ECONOMICS DIRECT INVESTMENT INFLOWS DOMESTIC FIRMS DYNAMIC PANEL ECONOMIC ANALYSIS ECONOMIC BENEFITS ECONOMIC DEVELOPMENT ECONOMIC GROWTH ECONOMIC INTEGRATION ECONOMICS ECONOMICS RESEARCH EDUCATIONAL ATTAINMENT EMPIRICAL LITERATURE EMPIRICAL RESULTS EMPIRICAL STUDIES EMPIRICAL WORK ENDOGENOUS VARIABLES ERROR TERM ESTIMATED COEFFICIENT EXOGENOUS VARIABLES EXPLANATORY VARIABLES EXPORTS FACTOR ENDOWMENTS FDI FINANCIAL MARKET FINANCIAL MARKETS FINANCIAL SYSTEMS FOREIGN CAPITAL FOREIGN CURRENCY FOREIGN DIRECT INVESTMENT FOREIGN INVESTMENT FOREIGN INVESTMENTS FRAMEWORK FOR REGULATIONS GDP GDP PER CAPITA GOVERNMENT REGULATIONS GROSS DOMESTIC PRODUCT GROWTH EQUATION GROWTH LITERATURE GROWTH RATE GROWTH RATES GROWTH REGRESSION HOST COUNTRIES HOST COUNTRY HOST ECONOMIES HOST ECONOMY HUMAN CAPITAL IMPACT OF REGULATIONS INCOME GROWTH INCOME LEVELS INDEPENDENT VARIABLES INDUSTRIAL ECONOMICS INFLATION RATE INTERNATIONAL ECONOMICS INTERNATIONAL TRADE INVESTMENT DECISIONS LABOR MARKET LAGGED GROWTH LANDLOCKED COUNTRIES LIQUIDITY MIDDLE EAST MODEL SPECIFICATIONS MONETARY ECONOMICS MULTINATIONAL COMPANIES MULTINATIONAL ENTERPRISES NEGATIVE SIGN NORTH AFRICA 0 HYPOTHESIS PER CAPITA GROWTH PER CAPITA INCOME POLICY IMPLICATIONS POLICY RESEARCH POSITIVE EFFECTS PRODUCTIVITY GROWTH PRODUCTIVITY INCREASES QUALITY REGULATIONS REGRESSION ANALYSIS REGULATORY COSTS REGULATORY ENVIRONMENT REGULATORY FRAMEWORK SIGNIFICANT IMPACT STANDARD DEVIATION SUB-SAHARAN AFRICA TECHNOLOGY SPILLOVERS TRADE LIBERALIZATION VERTICAL LINKAGES This paper explores the linkage between income growth rates and foreign direct investment (FDI) inflows. So far the evidence is rather mixed, as no robust relationship between FDI and income growth has been established. The authors argue that countries need a sound business environment in the form of good government regulations to be able to benefit from FDI. Using a comprehensive data set for regulations, they test this hypothesis and find evidence that excessive regulations restrict growth through FDI only in the most regulated economies. This result holds true for different specifications of the econometric model, including instrumental variable regressions. 2012-06-21T21:09:52Z 2012-06-21T21:09:52Z 2006-04 http://documents.worldbank.org/curated/en/2006/04/6727744/foreign-direct-investment-regulations-growth http://hdl.handle.net/10986/8728 English Policy Research Working Paper; No. 3882 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	English
topic	BANKRUPTCY BASE YEAR BENCHMARK BLACK MARKET BLACK MARKET PREMIUM BUSINESS REGULATIONS CAPITAL FLOWS CIVIL LIBERTIES COMPETITIVENESS COUNTRY CHARACTERISTICS COUNTRY REGRESSIONS DEPENDENT VARIABLE DESCRIPTIVE STATISTICS DEVELOPING COUNTRIES DEVELOPMENT ECONOMICS DIRECT INVESTMENT INFLOWS DOMESTIC FIRMS DYNAMIC PANEL ECONOMIC ANALYSIS ECONOMIC BENEFITS ECONOMIC DEVELOPMENT ECONOMIC GROWTH ECONOMIC INTEGRATION ECONOMICS ECONOMICS RESEARCH EDUCATIONAL ATTAINMENT EMPIRICAL LITERATURE EMPIRICAL RESULTS EMPIRICAL STUDIES EMPIRICAL WORK ENDOGENOUS VARIABLES ERROR TERM ESTIMATED COEFFICIENT EXOGENOUS VARIABLES EXPLANATORY VARIABLES EXPORTS FACTOR ENDOWMENTS FDI FINANCIAL MARKET FINANCIAL MARKETS FINANCIAL SYSTEMS FOREIGN CAPITAL FOREIGN CURRENCY FOREIGN DIRECT INVESTMENT FOREIGN INVESTMENT FOREIGN INVESTMENTS FRAMEWORK FOR REGULATIONS GDP GDP PER CAPITA GOVERNMENT REGULATIONS GROSS DOMESTIC PRODUCT GROWTH EQUATION GROWTH LITERATURE GROWTH RATE GROWTH RATES GROWTH REGRESSION HOST COUNTRIES HOST COUNTRY HOST ECONOMIES HOST ECONOMY HUMAN CAPITAL IMPACT OF REGULATIONS INCOME GROWTH INCOME LEVELS INDEPENDENT VARIABLES INDUSTRIAL ECONOMICS INFLATION RATE INTERNATIONAL ECONOMICS INTERNATIONAL TRADE INVESTMENT DECISIONS LABOR MARKET LAGGED GROWTH LANDLOCKED COUNTRIES LIQUIDITY MIDDLE EAST MODEL SPECIFICATIONS MONETARY ECONOMICS MULTINATIONAL COMPANIES MULTINATIONAL ENTERPRISES NEGATIVE SIGN NORTH AFRICA 0 HYPOTHESIS PER CAPITA GROWTH PER CAPITA INCOME POLICY IMPLICATIONS POLICY RESEARCH POSITIVE EFFECTS PRODUCTIVITY GROWTH PRODUCTIVITY INCREASES QUALITY REGULATIONS REGRESSION ANALYSIS REGULATORY COSTS REGULATORY ENVIRONMENT REGULATORY FRAMEWORK SIGNIFICANT IMPACT STANDARD DEVIATION SUB-SAHARAN AFRICA TECHNOLOGY SPILLOVERS TRADE LIBERALIZATION VERTICAL LINKAGES
spellingShingle	BANKRUPTCY BASE YEAR BENCHMARK BLACK MARKET BLACK MARKET PREMIUM BUSINESS REGULATIONS CAPITAL FLOWS CIVIL LIBERTIES COMPETITIVENESS COUNTRY CHARACTERISTICS COUNTRY REGRESSIONS DEPENDENT VARIABLE DESCRIPTIVE STATISTICS DEVELOPING COUNTRIES DEVELOPMENT ECONOMICS DIRECT INVESTMENT INFLOWS DOMESTIC FIRMS DYNAMIC PANEL ECONOMIC ANALYSIS ECONOMIC BENEFITS ECONOMIC DEVELOPMENT ECONOMIC GROWTH ECONOMIC INTEGRATION ECONOMICS ECONOMICS RESEARCH EDUCATIONAL ATTAINMENT EMPIRICAL LITERATURE EMPIRICAL RESULTS EMPIRICAL STUDIES EMPIRICAL WORK ENDOGENOUS VARIABLES ERROR TERM ESTIMATED COEFFICIENT EXOGENOUS VARIABLES EXPLANATORY VARIABLES EXPORTS FACTOR ENDOWMENTS FDI FINANCIAL MARKET FINANCIAL MARKETS FINANCIAL SYSTEMS FOREIGN CAPITAL FOREIGN CURRENCY FOREIGN DIRECT INVESTMENT FOREIGN INVESTMENT FOREIGN INVESTMENTS FRAMEWORK FOR REGULATIONS GDP GDP PER CAPITA GOVERNMENT REGULATIONS GROSS DOMESTIC PRODUCT GROWTH EQUATION GROWTH LITERATURE GROWTH RATE GROWTH RATES GROWTH REGRESSION HOST COUNTRIES HOST COUNTRY HOST ECONOMIES HOST ECONOMY HUMAN CAPITAL IMPACT OF REGULATIONS INCOME GROWTH INCOME LEVELS INDEPENDENT VARIABLES INDUSTRIAL ECONOMICS INFLATION RATE INTERNATIONAL ECONOMICS INTERNATIONAL TRADE INVESTMENT DECISIONS LABOR MARKET LAGGED GROWTH LANDLOCKED COUNTRIES LIQUIDITY MIDDLE EAST MODEL SPECIFICATIONS MONETARY ECONOMICS MULTINATIONAL COMPANIES MULTINATIONAL ENTERPRISES NEGATIVE SIGN NORTH AFRICA 0 HYPOTHESIS PER CAPITA GROWTH PER CAPITA INCOME POLICY IMPLICATIONS POLICY RESEARCH POSITIVE EFFECTS PRODUCTIVITY GROWTH PRODUCTIVITY INCREASES QUALITY REGULATIONS REGRESSION ANALYSIS REGULATORY COSTS REGULATORY ENVIRONMENT REGULATORY FRAMEWORK SIGNIFICANT IMPACT STANDARD DEVIATION SUB-SAHARAN AFRICA TECHNOLOGY SPILLOVERS TRADE LIBERALIZATION VERTICAL LINKAGES Busse, Matthias Groizard, José Luis Foreign Direct Investment, Regulations, and Growth
relation	Policy Research Working Paper; No. 3882
description	This paper explores the linkage between income growth rates and foreign direct investment (FDI) inflows. So far the evidence is rather mixed, as no robust relationship between FDI and income growth has been established. The authors argue that countries need a sound business environment in the form of good government regulations to be able to benefit from FDI. Using a comprehensive data set for regulations, they test this hypothesis and find evidence that excessive regulations restrict growth through FDI only in the most regulated economies. This result holds true for different specifications of the econometric model, including instrumental variable regressions.
format	Publications & Research :: Policy Research Working Paper
author	Busse, Matthias Groizard, José Luis
author_facet	Busse, Matthias Groizard, José Luis
author_sort	Busse, Matthias
title	Foreign Direct Investment, Regulations, and Growth
title_short	Foreign Direct Investment, Regulations, and Growth
title_full	Foreign Direct Investment, Regulations, and Growth
title_fullStr	Foreign Direct Investment, Regulations, and Growth
title_full_unstemmed	Foreign Direct Investment, Regulations, and Growth
title_sort	foreign direct investment, regulations, and growth
publisher	World Bank, Washington, DC
publishDate	2012
url	http://documents.worldbank.org/curated/en/2006/04/6727744/foreign-direct-investment-regulations-growth http://hdl.handle.net/10986/8728
_version_	1764405884491923456

Foreign Direct Investment, Regulations, and Growth

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