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The Determinants of Foreign Direct Investment in Developing Countries: The Relative Importance of Institutions and Infrastructure Versus Tax and Subsidy Incentives

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Title: The Determinants of Foreign Direct Investment in Developing Countries: The Relative Importance of Institutions and Infrastructure Versus Tax and Subsidy Incentives
Author: Brown, Eric C.
Advisor: Jilani, Saleha
Department: Haverford College. Dept. of Economics
Type: Thesis (B.A.)
Issue Date: 2010
Abstract: Foreign Direct Investment (FDI) is crucial to developing nations because of the benefit the host country receives in the form of productivity increases and technology transfers which fuel sustained growth in these economies. My thesis examines the factors that attract FDI to developing countries and assess the relative importance of the quality of institutions and infrastructure as compared to tax and subsidy incentives in attracting incoming FDI. I analyze panel data on 97 developing countries from 1975 to 2008 using both OLS and fixed effects regressions with FDI inflows as the dependent variable. Using standard controls I am able to isolate the effect that institutions, infrastructure, and tax and subsidy incentives have on the inflow of FDI. The evidence suggests low tax rates and subsidy incentives have a significant and positive impact on FDI inflows.
Subject: Investments, Foreign -- Developing countries
Subject: Investments, Foreign -- Government policy -- Developing countries
Subject: Economic policy -- Developing countries
Subject: Structural adjustment (Economic policy) -- Developing countries
Terms of Use: http://creativecommons.org/licenses/by-nc/3.0/us/
Permanent URL: http://hdl.handle.net/10066/4918

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Citation

Brown, Eric C.. "The Determinants of Foreign Direct Investment in Developing Countries: The Relative Importance of Institutions and Infrastructure Versus Tax and Subsidy Incentives". 2010. Available electronically from http://hdl.handle.net/10066/4918.

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http://creativecommons.org/licenses/by-nc/3.0/us/ Except where otherwise noted, this item's license is described as http://creativecommons.org/licenses/by-nc/3.0/us/

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