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Revisiting the relationship between governance and foreign direct investment

par Méon, Pierre-Guillaume ;Sekkat, Khalid
Référence Brussels economic review, 50, 1, page (41-61)
Publication Publié, 2007

Article révisé par les pairs

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Résumé :

Using a sample of 96 countries over the nineties, this paper examines the extent to which different dimensions of governance affect FDI inflows. It considers six aspects of governance. The results of a least-squares estimation suggest a positive relationship between institutional quality and FDI. However, when the issue of the endogeneity of governance is tackled thanks to 2SLS regressions, the relationship appears much weaker.