Foreign Direct Investment under Uncertainty: Evidence from a Large Panel of Countries
We examine the effect of uncertainty on foreign direct investment inflows for a heterogeneous sample of advanced, emerging market and developing countries over a 25 year long (pre-Covid) sample. Using a push-pull framework, and controlling for both global and local factors, we find policy uncertainty has discernable and significant effects on inflows, but those effects vary in strength and direction between different groups of countries. Moreover, it is not host country uncertainty that seems to matter the most, but rather global uncertainty. Additionally, we find that high levels of uncertainty matter disproportionately. Finally, financial openness accentuates the impact of uncertainty for emerging market and developing countries.
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Copy CitationCaroline Jardet, Cristina Jude, and Menzie D. Chinn, "Foreign Direct Investment under Uncertainty: Evidence from a Large Panel of Countries," NBER Working Paper 29687 (2022), https://doi.org/10.3386/w29687.
Published Versions
Caroline Jardet & Cristina Jude & Menzie Chinn, 2023. "Foreign direct investment under uncertainty evidence from a large panel of countries," Review of International Economics, vol 31(3), pages 854-885. citation courtesy of