Author(s)
El-Shagi, Makram / Muhammad, Bashir
Abstract
In this paper, we assess the effect of institutional similarity on foreign direct investment. In a large panel of bilateral FDI stocks that covers roughly 190 countries both as host and source countries of FDI, we demonstrate that it is not similar in general, but similar with respect to government involvement in markets and with respect to corruption that matters. Our finding is robust to a large set of different panel estimators and specifications of the gravity model that is underlying our estimation.
Keywords
FDI, Institutions, Similarity, Gravity model
El-Shagi, M. / Muhammad, B.: Institutional Similarity and Bilateral FDI, in: Journal of the Knowledge Economy, Vol. 15, pp. 4605–4638, 2024.