The effect of institutional factors on foreign direct investment: An econometric analysis

The purpose of this dissertation is to examine impact of institutional factors onforeign direct investment (FDI) in 71 developed and developing countries for the periodof 1995 -2002 by using cross-sectional data. First part of the study describes theoriesabout foreign direct investment and regional distribution of FDI. Second part of thestudy contains economic and institutional factors that affecting FDI. In the last part ofthe study, basicly three models (institutional, economic and regional-institutional) aredeveloped and tested. Test results show that institutional factors such as voice andaccountability, political stability, efficiency of bureaucracy, rule of law, quality ofregulations and lack of corruption are positively related to FDI.