{
  "title": "Determinants of Foreign Direct Investment: A Sectoral and Institutional Approach",
  "publication": "IMF Working Papers, August 1, 2010",
  "sourceUrl": "https://www.imf.org/en/publications/wp/issues/2016/12/31/determinants-of-foreign-direct-investment-a-sectoral-and-institutional-approach-24135",
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  "summary": "Using a dataset which breaks down FDI flows into primary, secondary and tertiary sector investments and a GMM dynamic approach to address concerns about endogeneity, the paper analyzes various macroeconomic, developmental, and institutional/qualitative determinants of FDI in a sample of emerging mar",
  "sections": [
    {
      "heading": "Research scope and methodology",
      "content": "- Dataset breaks down FDI flows into primary, secondary and tertiary sector investments.\n- Employs a GMM dynamic approach to address concerns about endogeneity.\n- Sample covers emerging market and developed economies.\n- Authors: Jiangyan Yu, James P Walsh.\n- Publication date: August 1, 2010.\n- Series: Working Paper No. 2010/187; Issue: 187; Volume: 2010; Pages: 27.\n- DOI: https://doi.org/10.5089/9781455202218.001\n- Stock No: WPIEA2010187; ISBN: 9781455202218; ISSN: 1018-5941."
    },
    {
      "heading": "Key findings — sectoral differences",
      "content": "- Primary sector FDI flows:\n  - Show little dependence on the macroeconomic, developmental, and institutional/qualitative variables analyzed.\n- Secondary and tertiary sector FDI flows:\n  - Are affected in different ways by countries’ income levels and exchange rate valuation.\n  - Respond to development indicators such as financial depth and school enrollment.\n  - Respond to institutional factors such as judicial independence and labor market flexibility.\n- Effects often differ between advanced and emerging economies."
    },
    {
      "heading": "Determinants examined",
      "content": "- Macroeconomic variables:\n  - Exchange rate valuation (real effective exchange rates, real exchange rates).\n  - Countries’ income levels.\n- Developmental indicators:\n  - Financial depth.\n  - School enrollment.\n- Institutional / qualitative factors:\n  - Judicial independence.\n  - Labor market flexibility."
    },
    {
      "heading": "Subject classification and keywords",
      "content": "- Subject: Emerging and frontier financial markets, Foreign direct investment, Labor market flexibility, Real effective exchange rates, Real exchange rates.\n- Keywords: FDI flow, FDI inflow, FDI stock, primary sector FDI, tertiary sector, WP."
    },
    {
      "heading": "Implications (implicit in findings)",
      "content": "- Policy and analytical emphasis should be sector-sensitive:\n  - Primary-sector FDI may be less sensitive to macroeconomic, developmental, and institutional reforms.\n  - Secondary- and tertiary-sector FDI are more responsive to improvements in financial depth, education (school enrollment), institutional quality (judicial independence), and labor market flexibility.\n- Exchange rate policy and income-level considerations matter differently across sectors and between advanced and emerging economies.\n\nSource: \"Determinants of Foreign Direct Investment: A Sectoral and Institutional Approach\", IMF Working Papers 2010, 187 (2010), Jiangyan Yu and James P Walsh, August 1, 2010.\n\n---\n\n Content in this bundle\n\n- wp10187\n  - wp10187 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - wp10187 (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2016/12/31/determinants-of-foreign-direct-investment-a-sectoral-and-institutional-approach-24135"
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    "Authors: Jiangyan Yu, James P Walsh",
    "Published: August 1, 2010",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9781455202218.001",
    "Dataset breaks down FDI flows into primary, secondary and tertiary sector investments.",
    "Employs a GMM dynamic approach to address concerns about endogeneity.",
    "Sample covers emerging market and developed economies.",
    "Authors: Jiangyan Yu, James P Walsh.",
    "Publication date: August 1, 2010.",
    "Series: Working Paper No. 2010/187; Issue: 187; Volume: 2010; Pages: 27.",
    "DOI: https://doi.org/10.5089/9781455202218.001",
    "Stock No: WPIEA2010187; ISBN: 9781455202218; ISSN: 1018-5941.",
    "Primary sector FDI flows:",
    "Secondary and tertiary sector FDI flows:",
    "Effects often differ between advanced and emerging economies.",
    "Macroeconomic variables:",
    "Developmental indicators:",
    "Institutional / qualitative factors:",
    "Subject: Emerging and frontier financial markets, Foreign direct investment, Labor market flexibility, Real effective exchange rates, Real exchange rates.",
    "Keywords: FDI flow, FDI inflow, FDI stock, primary sector FDI, tertiary sector, WP.",
    "Policy and analytical emphasis should be sector-sensitive:",
    "Exchange rate policy and income-level considerations matter differently across sectors and between advanced and emerging economies.",
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