HCBE Faculty Articles

Formal institutions and foreign direct investment

ORCID

Belay Seyoum0000-0002-8527-6481

Document Type

Article

Publication Title

Thunderbird International Business Review

ISSN

1520-6874

Publication Date

2009

Abstract/Excerpt

This study examines the impact of formal institutions on foreign direct investment. First, the quality (strength or weakness) of formal institutions in host countries is analyzed. Second, the absolute differences in the quality of formal institutions between the host and home countries are examined. The results show that (1) strong formal institutions in host countries positively influence FDI flows and (2) the larger the institutional distance between the home and host country, the lesser the FDI inflows.

DOI

https://doi.org/10.1002/tie.20256

Volume

51

Issue

2

First Page

165

Last Page

181

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