IMF Working Papers

Economic Policies and FDI Inflows to Emerging Market Economies

By Elif C Arbatli Saxegaard

August 1, 2011

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Elif C Arbatli Saxegaard. Economic Policies and FDI Inflows to Emerging Market Economies, (USA: International Monetary Fund, 2011) accessed November 23, 2024
Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

This paper investigates the determinants of FDI inflows to emerging market economies, concentrating on the effects of economic policies. The empirical analysis also addresses the role of external push factors and of political stability using a domestic conflict events database. The results suggest that lowering corporate tax rates and trade tariffs, adopting fixed or managed exchange rate policies and eliminating FDI related capital controls have played an important role. Domestic conflict events and political instability are found to have significant negative effects on FDI, which highlights the role of incluside policies to promote growth and avoid sudden stops of FDI inflows.

Subject: Balance of payments, Capital account, Corporate income tax, Emerging and frontier financial markets, Financial markets, Financial services, Foreign direct investment, Real interest rates, Taxes

Keywords: A. FDI inflow, Capital account, Central and Eastern Europe, Corporate income tax, Country specific pull factors, Crisis lead, Economic Policies, Emerging and frontier financial markets, Emerging Market Economies, FDI, FDI flow, FDI inflow, FDI inflows to EME, Foreign direct investment, Global, Government policy, Government stability, Growth rate, Major government crisis, Moving average, Real interest rates, Time series, WP

Publication Details

  • Pages:

    25

  • Volume:

    ---

  • DOI:

    ---

  • Issue:

    ---

  • Series:

    Working Paper No. 2011/192

  • Stock No:

    WPIEA2011192

  • ISBN:

    9781462306251

  • ISSN:

    1018-5941

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