The nexus between governance factors and foreign direct investments: Evidence from panel data

OpenAlex İngilizce

In recent years, Foreign Direct Investments (FDI) has been a vastly discussed economic term by both researchers and policy-makers.Foreign expertise provides various economic bene􀅫its to the host countries through improving existing production processes, increasing competitiveness, and reducing disparities in welfare.Foreign direct investment 􀅫lows could be in􀅫luenced by several institutional, economic and political factors.This paper aims to check up on the empirical relation between FDI and these factors in a panel of 12 countries for the 2002-2015 time period.In analysis, we employed an empirical method that considers cross-sectional dependence.Therefore, we explored long-term relations between variables through an estimation approach using Westerlund (2008) Durbin Hausman cointegration method and AMG estimator after unit root tests of variables.Empirical results clarify a positive connection between FDI and governance factors for some countries in the panel.