Economic Policies and FDI Inflows to Emerging Market Economies

Author/Editor:

Elif C Arbatli

Publication Date:

August 1, 2011

Electronic Access:

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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.

Series:

Working Paper No. 11/192

English

Publication Date:

August 1, 2011

ISBN/ISSN:

9781462306251/1018-5941

Stock No:

WPIEA2011192

Price:

$18.00 (Academic Rate:$18.00)

Format:

Paper

Pages:

25

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