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The Determinants of FDI in Landlocked Developing Countries in Central Asia

  • Nomintsetseg Ulzii-Ochir
Chapter

Abstract

This study aims to define why mineral-resource-rich landlocked developing countries (LLDCs) in Central Asia are less attractive than other regions for foreign investors. The results show that a higher return on capital, openness, and good quality of infrastructure promotes foreign direct investment (FDI) in LLDCs in Central Asia. However, a decline in corruption has a positive effect on FDI, while regulatory quality and degree of business freedom have insignificant impacts on investment. Remarkably, political instability, corporate tax rate, and inflation have a positive impact on FDI. LLDCs in Central Asia are likely to have a weak and inefficient decision-making process, which would eventually attract investors trying to seize opportunities. These results reveal that political instability, a high corporate tax rate, and a high inflation rate do not always lead to less FDI flow.

Keywords

Landlocked developing countries Central Asia Foreign direct investment Determinants 

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Copyright information

© The Author(s) 2019

Authors and Affiliations

  • Nomintsetseg Ulzii-Ochir
    • 1
  1. 1.Business SchoolNational University of MongoliaUlaanbaatarMongolia

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