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| Author: | Harding, T. Javorcik, B.S. |
| Title: | Roll out the red carpet and they will come: investment promotion and FDI inflows |
| Journal: | Economic Journal
2011 : DEC, VOL 121:557 p. 1445-1476 |
| Index terms: | foreign investment developing countries capital flows savings promotion |
| Freeterms: | information asymmetry |
| Language: | eng |
| Abstract: | This study uses newly collected data on 124 countries to research the effects of investment promotion on US foreign direct investment (FDI) inflows. It is tested whether sectors explicitly targeted by investment promotion agencies in order to attract FDI receive more investment after the targeting period, compared to the pre-targeting period and non-targeted sectors. The results of our analysis are consistent with investment promotion resulting to higher FDI flows to countries where red tape and information asymmetries are likely to be harsh. The data imply that investment promotion works in developing countries, however not in industrialised economies. |
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