Skip to main content

Part of the book series: Advances in Intelligent Systems and Computing ((AISC,volume 1002))

  • 1374 Accesses

Abstract

This  study aims to examine the effect of Autocracy and Democracy on Foreign Direct Investment (FDI) inflows in 15 Asian developing countries. For empirical examination, this study used panel data over the period 1995 to 2015 by employing dynamic panel data. The study shows a significant and positive relationship with autocracy and significant and negative relation with democracy. The empirical finding suggests that the country can attract more FDI in the presence of more autocratic institutions and less democratic institutions. Among the controlling variables trade, market capitalisation, population and literacy rate are significant with democracy while trade becomes insignificant with the main variable democracy.

This is a preview of subscription content, log in via an institution to check access.

Access this chapter

Chapter
USD 29.95
Price excludes VAT (USA)
  • Available as PDF
  • Read on any device
  • Instant download
  • Own it forever
eBook
USD 169.00
Price excludes VAT (USA)
  • Available as EPUB and PDF
  • Read on any device
  • Instant download
  • Own it forever
Softcover Book
USD 219.99
Price excludes VAT (USA)
  • Compact, lightweight edition
  • Dispatched in 3 to 5 business days
  • Free shipping worldwide - see info

Tax calculation will be finalised at checkout

Purchases are for personal use only

Institutional subscriptions

References

  1. Agbloyor, E.K., Gyeke-Dako, A., et al.: Foreign direct investment and economic growth in SSA: the role of institutions. Thunderbird Int. Bus. Rev. 58(5), 479–497 (2016)

    Article  Google Scholar 

  2. Bano, S., Zhao, Y., et al.: Why did fdi inflows of Pakistan decline? from the perspective of terrorism, energy shortage, financial instability, and political instability. Emerg. Mark. Financ. Trade 55(1), 90–104 (2019)

    Article  Google Scholar 

  3. Bellos, S., Subasat, T.: Governance and foreign direct investment: a panel gravity model approach. Int. Rev. Appl. Econ. 26(3), 303–328 (2012)

    Article  Google Scholar 

  4. Chen, K., Nie, H., Ge, Z.: Policy uncertainty and FDI: evidence from national elections. J. Int. Trade Econ. Dev., 1–10 (2018)

    Google Scholar 

  5. Cuthbertson, K.: The expectations hypothesis of the term structure: The UK interbank market. Econ. J. 106(436), 578–592 (1996)

    Article  Google Scholar 

  6. Du, J., Lu, Y., Tao, Z.: Regional institutional strength and FDI location choice in China: implications for East Asian FDI source countries/areas. Tech. rep., Working Paper Series 9 (2008)

    Google Scholar 

  7. Guerin, S.S., Manzocchi, S.: Political regime and fdi from advanced to emerging countries. Rev. World Econ. 145(1), 75–91 (2009)

    Article  Google Scholar 

  8. Harms, P., Ursprung, H.W.: Do civil and political repression really boost foreign direct investments? Econ. Inq. 40(4), 651–663 (2002)

    Article  Google Scholar 

  9. Jensen, N.M.: Democratic governance and multinational corporations: political regimes and inflows of foreign direct investment. Int. Organ. 57(3), 587–616 (2003)

    Article  Google Scholar 

  10. Li, Q.: Democracy, autocracy, and expropriation of foreign direct investment. Comp. Polit. Stud. 42(8), 1098–1127 (2009)

    Article  Google Scholar 

  11. Li, Q., Resnick, A.: Reversal of fortunes: democratic institutions and foreign direct investment inflows to developing countries. Int. Organ. 57(1), 175–211 (2003)

    Article  Google Scholar 

  12. Libman, A., Vinokurov, E.: Is it really different? patterns of regionalisation in post-soviet central Asia. Post-Communist Econ. 23(4), 469–492 (2011)

    Article  Google Scholar 

  13. Mathur, A., Singh, K.: Foreign direct investment, corruption and democracy. Appl. Econ. 45(8), 991–1002 (2013)

    Article  Google Scholar 

  14. Mengistu, A.A., Adhikary, B.K.: Does good governance matter for FDI inflows? evidence from Asian economies. Asia Pac. Bus. Rev. 17(3), 281–299 (2011)

    Article  Google Scholar 

  15. North, D.C., Weingast, B.R.: Constitutions and commitment: the evolution of institutions governing public choice in seventeenth-century England. J. Econ. Hist. 49(4), 803–832 (1989)

    Article  Google Scholar 

  16. Okafor, E.E.: Youth unemployment and implications for stability of democracy in Nigeria. J. Sustain. Dev. Afr. 13(1), 358–373 (2011)

    Google Scholar 

  17. Olson, M.: Dictatorship, democracy, and development. Am. Polit. Sci. Rev. 87(3), 567–576 (1993)

    Article  Google Scholar 

  18. Oneal, J.R.: The affinity of foreign investors for authoritarian regimes. Polit. Res. Q. 47(3), 565–588 (1994)

    Article  Google Scholar 

  19. Resnick, A.L.: Investors, turbulence, and transition: democratic transition and foreign direct investment in nineteen developing countries. Int. Interact. 27(4), 381–398 (2001)

    Article  Google Scholar 

  20. Tsamadias, C., Pegkas, P., Mamatzakis, E., Staikouras, C.: Does R&D, human capital and FDI matter for TFP in OECD countries? Econ. Innov. New Technol. 28(4), 386–406 (2019)

    Article  Google Scholar 

  21. White, H.: Using least squares to approximate unknown regression functions. Int. Econ. Rev. 21, 149–170 (1980)

    Article  MathSciNet  Google Scholar 

Download references

Author information

Authors and Affiliations

Authors

Corresponding author

Correspondence to Qurat ul Ain .

Editor information

Editors and Affiliations

Rights and permissions

Reprints and permissions

Copyright information

© 2020 Springer Nature Switzerland AG

About this paper

Check for updates. Verify currency and authenticity via CrossMark

Cite this paper

Yousaf, T., Ain, Q.u., Akhtar, Y. (2020). Effects of Autocracy and Democracy on FDI’s Inflows. In: Xu, J., Ahmed, S., Cooke, F., Duca, G. (eds) Proceedings of the Thirteenth International Conference on Management Science and Engineering Management. ICMSEM 2019. Advances in Intelligent Systems and Computing, vol 1002. Springer, Cham. https://doi.org/10.1007/978-3-030-21255-1_40

Download citation

Publish with us

Policies and ethics