Foreign Direct Investment in oil-abundant countries: The role of institutions

The present work reassesses the impact of good governance and democracy on Foreign Direct Investment (FDI) in oil-abundant countries. To this end, we estimate the effect of host countries’ institutions on greenfield FDI, using a gravity equation for a dataset that covers 182 countries during 2003-20...

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Detalles Bibliográficos
Autores principales: Carril-Caccia, Federico, Milgram-Baleix, Juliette, Paniagua, Jordi
Formato: Online Artículo Texto
Lenguaje:English
Publicado: Public Library of Science 2019
Materias:
Research Article
Acceso en línea:https://www.ncbi.nlm.nih.gov/pmc/articles/PMC6478325/
https://www.ncbi.nlm.nih.gov/pubmed/31013300
http://dx.doi.org/10.1371/journal.pone.0215650
Descripción
Sumario:The present work reassesses the impact of good governance and democracy on Foreign Direct Investment (FDI) in oil-abundant countries. To this end, we estimate the effect of host countries’ institutions on greenfield FDI, using a gravity equation for a dataset that covers 182 countries during 2003-2012. Our findings confirm that compliance to rule of law, lack of corruption, political stability and democracy could boost new FDI links through the extensive margin. Our results could not rule out the “oil curse”, meaning that oil producers attract fewer new greenfield projects than similar countries without oil. Unlike other studies, we show that the impact of institutions is not necessarily undermined by the presence of natural resources.

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