Determinants of Foreign Direct Investment in Developing Countries: A Comparative Analysis (2024)

Abstract

By bridging the gap between domestic savings and investment and bringing the latest technology and management know-how from developed countries, foreign direct investment (FDI) can play an important role in achieving rapid economic growth in developing countries. Developing countries have not been considered as favourable destinations for FDI as developed countries. Moreover, among the developing countries a few, such as China, India, Nigeria and Sudan, are the major recipients of FDI, with the rest vying for the scraps. Using panel data from 68 low-income and lower-middle income developing countries, this article strives to identify the factors that determine FDI inflow to developing countries. Based on a comparative discussion focussing on why some countries are successful in attracting FDI, the article demonstrates that countries with larger GDPs, higher GDP growth rates, higher proportion of international trade and a more business-friendly environment are more successful in attracting FDI.

Original languageEnglish
Pages (from-to)369-404
Number of pages36
JournalMargin
Volume4
Issue number4
DOIs
Publication statusPublished - 1 Nov 2010

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Mottaleb, K. A. (2010). Determinants of Foreign Direct Investment in Developing Countries: A Comparative Analysis. Margin, 4(4), 369-404. https://doi.org/10.1177/097380101000400401

Mottaleb, Khondoker Abdul ; Kalirajan, Kaliappa. / Determinants of Foreign Direct Investment in Developing Countries : A Comparative Analysis. In: Margin. 2010 ; Vol. 4, No. 4. pp. 369-404.

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Mottaleb, KA 2010, 'Determinants of Foreign Direct Investment in Developing Countries: A Comparative Analysis', Margin, vol. 4, no. 4, pp. 369-404. https://doi.org/10.1177/097380101000400401

Determinants of Foreign Direct Investment in Developing Countries: A Comparative Analysis. / Mottaleb, Khondoker Abdul; Kalirajan, Kaliappa.
In: Margin, Vol. 4, No. 4, 01.11.2010, p. 369-404.

Research output: Contribution to journalArticlepeer-review

TY - JOUR

T1 - Determinants of Foreign Direct Investment in Developing Countries

T2 - A Comparative Analysis

AU - Mottaleb, Khondoker Abdul

AU - Kalirajan, Kaliappa

N1 - Publisher Copyright:©.

PY - 2010/11/1

Y1 - 2010/11/1

N2 - By bridging the gap between domestic savings and investment and bringing the latest technology and management know-how from developed countries, foreign direct investment (FDI) can play an important role in achieving rapid economic growth in developing countries. Developing countries have not been considered as favourable destinations for FDI as developed countries. Moreover, among the developing countries a few, such as China, India, Nigeria and Sudan, are the major recipients of FDI, with the rest vying for the scraps. Using panel data from 68 low-income and lower-middle income developing countries, this article strives to identify the factors that determine FDI inflow to developing countries. Based on a comparative discussion focussing on why some countries are successful in attracting FDI, the article demonstrates that countries with larger GDPs, higher GDP growth rates, higher proportion of international trade and a more business-friendly environment are more successful in attracting FDI.

AB - By bridging the gap between domestic savings and investment and bringing the latest technology and management know-how from developed countries, foreign direct investment (FDI) can play an important role in achieving rapid economic growth in developing countries. Developing countries have not been considered as favourable destinations for FDI as developed countries. Moreover, among the developing countries a few, such as China, India, Nigeria and Sudan, are the major recipients of FDI, with the rest vying for the scraps. Using panel data from 68 low-income and lower-middle income developing countries, this article strives to identify the factors that determine FDI inflow to developing countries. Based on a comparative discussion focussing on why some countries are successful in attracting FDI, the article demonstrates that countries with larger GDPs, higher GDP growth rates, higher proportion of international trade and a more business-friendly environment are more successful in attracting FDI.

KW - Developing Country

KW - Foreign Direct Investment (FDI)

KW - Low-income Country

KW - Lower-middle Income Country

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U2 - 10.1177/097380101000400401

DO - 10.1177/097380101000400401

M3 - Article

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Mottaleb KA, Kalirajan K. Determinants of Foreign Direct Investment in Developing Countries: A Comparative Analysis. Margin. 2010 Nov 1;4(4):369-404. doi: 10.1177/097380101000400401

Determinants of Foreign Direct Investment in Developing Countries: A Comparative Analysis (2024)

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