FDI ATTRACTIVENESS: AN ATTEMPT TO COMPARE COUNTRIES

Ahmet Oguz Demir

Abstract


The aim of this research is to examine the reasons of the level of FDI inflow differences among countries and try to understand why some countries are more attractive for investors. The research used a dataset of 103 countries for due to data availability and created a FDI Inflow Index for 2016. Principal Components Analysis was used to analyze and construct the FDI Index. The results show that even there are substantial improvements in the conditions of developing economies for higher FDI levels, still, the macroeconomic conditions, business and legal environment and agglomeration effects are better situated in developed economies which make them more attractive for investors.


Keywords


FDI Attractiveness, Composite Indicator, Principal Components Analysis

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