COUNTRY RISK PERCEPTIONS AND FOREIGN DIRECT INVESTMENT IN EMERGING MARKET ECONOMIES: A PANEL DATA ANALYSIS
AbstractThis study aims at examining the impact of major political risk, financial risk and economic factors on FDI inflows in the emerging economies along with basic economic fundamentals such as institutional variables namely, per capita GDP, per capita electric consumption, trade openness and real rate of interest. This study has followed a static panel data approach in studying the impact of these crucial variables on FDI inflows in fifteen major emerging economies for the period 2000 to 2014. Risk perceptions i.e., political risk and other risk perceptions data have been collected from the International Country Risk Guide (ICRG) provided by the Political Risk Services (PRS) Group. Our results demonstrate that risk perception components such as government stability, quality bureaucracy etc., are statistically significant with expected signs in explaining variation in FDI inflows of the major emerging countries.
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