The Determinants Of Liberalization Of FDI Policy In Developing Countries
- Topics:
- Foreign Direct Investment
- Tags:
- Currency & Foreign Exchange,
- Developing Country,
- Finance,
- Foreign Direct Investment,
- Foreign Direct Investment (FDI),
- Free Trade,
- Investment,
- Liberalization
- Source:
- University of Pennsylvania
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Overview: The decade of the 1990s was characterized by widespread liberalization of law and regulation affecting inflows of Foreign Direct Investment (FDI) in developing countries.. Ninety-five percent of the changes in FDI policy over the decade were liberalizing rather than restrictive. Two possible explanations of liberalization are posited: policy makers' beliefs that liberalization is in the best interest of the country and external pressure from either the dominant power (the United States) or international organizations such as the World Bank or IMF. Results provide support for the "Opportunity costs of closure" argument and do not support the external pressure thesis. Country size, level of development, human resource capabilities and trade openness are the primary determinants of the propensity to liberalize.
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Format: PDF | Size: 286KB | Date: Jun 2004 | Pages: 41
