Foreign Direct Investment , Commitment Institutions , and Time Horizon : How Some Autocrats Do Better than Others *

Content Provider	Semantic Scholar
Author	Moon, C. Preston
Copyright Year	2015
Abstract	Why do some autocratic governments do better than others in attracting foreign direct investment (FDI)? The received wisdom holds that democracies enjoy advantages over autocracies when it comes to attracting FDI. But there exist autocratic countries that attract substantial amounts of FDI. For example, during the last two decades, about half of the top 20 non-OECD host countries are nondemocratic. Focusing on the role of commitment institutions by which host countries can commit their protection of foreign assets, I argue that autocrats with long time horizons can provide stronger institutions to protect property rights. This allows them to attract more FDI. Using an error correction model (EDM) covering autocratic countries from 1970 to 2008, I find evidence that strongly supports my argument. These findings suggest that what matters to foreign investors is not regime type per se but specific institutional features of the host country. Insofar as host countries provide sound institutions to protect foreign assets, they would be able to attract more foreign investment.
File Format	PDF HTM / HTML
Alternate Webpage(s)	http://myweb.fsu.edu/cm06h/document/Moon_2015.pdf
Language	English
Access Restriction	Open
Subject Keyword	Error correction model Error detection and correction Existential quantification Eye foreign bodies Fault detection and isolation Government Organisation for Economic Co-Operation and Development
Content Type	Text
Resource Type	Article