JOURNAL OF APPLIED BUSINESS AND ECONOMICS
Foreign Direct Investment Flows: An Examination of Its Distribution
Among Middle- and Low-Income Countries
Author(s): Gabriel Manrique, Val Vlad, Yanping Chong
Citation: Gabriel Manrique, Val Vlad, Yanping Chong, (2013) "Foreign Direct Investment Flows: An Examination of Its Distribution Among Middle- and Low-Income Countries," Journal of Applied Business and Economics, Vol. 14, Iss. 3, pp. 108-122
Article Type: Research paper
Publisher: North American Business Press
Abstract:
The potential effects foreign direct investment (FDI) has on growth and employment have led many
developing countries to compete for FDI. In a period of rapid globalization the competition for FDI
inflows has become intense. We examine factors that affect the distribution of relative shares of FDI flows
among low- and middle-income developing countries using panel data. We use a simultaneous equations
model to account for the bidirectional determination between the FDI stock and FDI flow. Estimation
results demonstrate that countries with higher GDP growth rates, lower tax rates, smaller cost of business
start-up, less corruption and higher secondary school enrollment are more successful in attracting FDI.