Foreign Direct Investment under Uncertainty: Evidence from a Large Panel of Countries / Caroline Jardet, Cristina Jude, Menzie D. Chinn.

Format:

Book

Author/Creator:

Jardet, Caroline.

Contributor:

National Bureau of Economic Research.

Jude, Cristina.

Chinn, Menzie D.

Series:

Working Paper Series (National Bureau of Economic Research) no. w29687.

NBER working paper series no. w29687

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2022.

Summary:

We examine the effect of uncertainty on foreign direct investment inflows for a heterogeneous sample of advanced, emerging market and developing countries over a 25 year long (pre-Covid) sample. Using a push-pull framework, and controlling for both global and local factors, we find policy uncertainty has discernable and significant effects on inflows, but those effects vary in strength and direction between different groups of countries. Moreover, it is not host country uncertainty that seems to matter the most, but rather global uncertainty. Additionally, we find that high levels of uncertainty matter disproportionately. Finally, financial openness accentuates the impact of uncertainty for emerging market and developing countries.

Notes:

Print version record

January 2022.