Multi-level determinants of inward FDI ownership
Samyukta Bhupatiraju
#2014-085
In this paper, we empirically analyse the determinants of FDI ownership
into developing countries. We do this by using firm-level data obtained
from the Enterprise Surveys data of the World Bank and country level
data from various sources. Using a multi-level logit model, we analyse
how institutional and structural variables at both firm and country
levels impact inward FDI. In our view, there is a gap between analysis
at the country level studies and firm level studies on inward FDI. In
this paper, we fill the gap by doing a multi-level regression analysis,
taking into account both firm variables and country characteristics to
explain inward FDI ownership. We find that firm structural
characteristics and obstacles they face most affect inward FDI. While
some macroeconomic variables such as GDP per capita, inflation and
openness have a significant influence, other variables that measure
institutional quality of a country do not have any statistically
significant influence on FDI inflow.
Keywords: Multilevel analysis; Foreign ownership; Institutions
JEL Classification: F20, O11, O12, O43