How do efi and cpi impact foreign direct investment (Fdi) inflows in selected emerging markets?
Journal of Economic Cooperation and Development, vol.42, no.2, pp.199-216, 2021 (Scopus)
- Publication Type: Article / Article
- Volume: 42 Issue: 2
- Publication Date: 2021
- Journal Name: Journal of Economic Cooperation and Development
- Journal Indexes: Scopus, International Bibliography of Social Sciences, ABI/INFORM, EconLit, Index Islamicus
- Page Numbers: pp.199-216
- Keywords: CPI, Economic Freedom, FDI, PANEL ARDL
- Ankara Yıldırım Beyazıt University Affiliated: No
Abstract
This study examines the determinants of foreign direct investment in certain countries in emerging markets. The most distinctive feature that distinguishes this empirical research from its peers is that it includes the EFI (Economic Freedom Index) and CPI (Corruption Perception Index) scores as the explanatory variable in the model. After cross-section dependency tests and unit root tests, long and short-term parameters were estimated by ARDL model. The empirical method was employed on data set during the period 1997-2018 to determine the impact of economic freedom index and corruption perceptions index on foreign direct investment in selected emerging markets. The empirical results show that the relationship between corruption perceptions index and foreign direct investment is a positive, The effect of CPI was found to be significant among the long-term parameters, and an increase of 1% significant level increases FDI by 7% significant level.