Fiscal rules and foreign direct investment in developing countries

Detalhes bibliográficos
Autor(a) principal: Crépin, Hisguima Dassidi
Data de Publicação: 2023
Tipo de documento: Artigo
Idioma: eng
Título da fonte: Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)
Texto Completo: http://hdl.handle.net/10400.5/29389
Resumo: This study analyses the effect of fiscal rules on Foreign Direct Investment (FDI) in developing countries. Using a sample of 78 countries, we use the entropy balancing method to analyze the causal effect of rule adoption on FDI. Two hypotheses are tested in this study. The first one states that adopting fiscal rules increases FDI, and the second one is related to the ability of different types of rules to attract more investments. First, the robust results show that adopting fiscal rules increases FDI. The ratio of the public deficit to GDP, the rating of long-term sovereign debt in foreign currency, and the ratio of short-term external debt outstanding are the transmission channels through which fiscal rules affect FDI. The effect of the rules is amplified in the presence of a high level of business climate, economic performance, and better structuring of the agricultural and industrial sectors. On the other hand, this effect is attenuated in the presence of mineral rents and the economy’s high real interest rate.
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spelling Fiscal rules and foreign direct investment in developing countriesFiscal rulesForeign Direct Investmentfiscal policyThis study analyses the effect of fiscal rules on Foreign Direct Investment (FDI) in developing countries. Using a sample of 78 countries, we use the entropy balancing method to analyze the causal effect of rule adoption on FDI. Two hypotheses are tested in this study. The first one states that adopting fiscal rules increases FDI, and the second one is related to the ability of different types of rules to attract more investments. First, the robust results show that adopting fiscal rules increases FDI. The ratio of the public deficit to GDP, the rating of long-term sovereign debt in foreign currency, and the ratio of short-term external debt outstanding are the transmission channels through which fiscal rules affect FDI. The effect of the rules is amplified in the presence of a high level of business climate, economic performance, and better structuring of the agricultural and industrial sectors. On the other hand, this effect is attenuated in the presence of mineral rents and the economy’s high real interest rate.ISEG - REM - Research in Economics and MathematicsRepositório da Universidade de LisboaCrépin, Hisguima Dassidi2023-11-14T13:28:11Z2023-112023-11-01T00:00:00Zinfo:eu-repo/semantics/publishedVersioninfo:eu-repo/semantics/articleapplication/pdfhttp://hdl.handle.net/10400.5/29389engCrépin, Hisguima Dassidi (2023). "Fiscal rules and foreign direct investment in developing countries". REM Working paper series, nº 0299/20232184-108Xinfo:eu-repo/semantics/openAccessreponame:Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)instname:Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informaçãoinstacron:RCAAP2023-11-19T01:31:44Zoai:www.repository.utl.pt:10400.5/29389Portal AgregadorONGhttps://www.rcaap.pt/oai/openaireopendoar:71602024-03-19T22:54:06.493092Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) - Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informaçãofalse
dc.title.none.fl_str_mv Fiscal rules and foreign direct investment in developing countries
title Fiscal rules and foreign direct investment in developing countries
spellingShingle Fiscal rules and foreign direct investment in developing countries
Crépin, Hisguima Dassidi
Fiscal rules
Foreign Direct Investment
fiscal policy
title_short Fiscal rules and foreign direct investment in developing countries
title_full Fiscal rules and foreign direct investment in developing countries
title_fullStr Fiscal rules and foreign direct investment in developing countries
title_full_unstemmed Fiscal rules and foreign direct investment in developing countries
title_sort Fiscal rules and foreign direct investment in developing countries
author Crépin, Hisguima Dassidi
author_facet Crépin, Hisguima Dassidi
author_role author
dc.contributor.none.fl_str_mv Repositório da Universidade de Lisboa
dc.contributor.author.fl_str_mv Crépin, Hisguima Dassidi
dc.subject.por.fl_str_mv Fiscal rules
Foreign Direct Investment
fiscal policy
topic Fiscal rules
Foreign Direct Investment
fiscal policy
description This study analyses the effect of fiscal rules on Foreign Direct Investment (FDI) in developing countries. Using a sample of 78 countries, we use the entropy balancing method to analyze the causal effect of rule adoption on FDI. Two hypotheses are tested in this study. The first one states that adopting fiscal rules increases FDI, and the second one is related to the ability of different types of rules to attract more investments. First, the robust results show that adopting fiscal rules increases FDI. The ratio of the public deficit to GDP, the rating of long-term sovereign debt in foreign currency, and the ratio of short-term external debt outstanding are the transmission channels through which fiscal rules affect FDI. The effect of the rules is amplified in the presence of a high level of business climate, economic performance, and better structuring of the agricultural and industrial sectors. On the other hand, this effect is attenuated in the presence of mineral rents and the economy’s high real interest rate.
publishDate 2023
dc.date.none.fl_str_mv 2023-11-14T13:28:11Z
2023-11
2023-11-01T00:00:00Z
dc.type.status.fl_str_mv info:eu-repo/semantics/publishedVersion
dc.type.driver.fl_str_mv info:eu-repo/semantics/article
format article
status_str publishedVersion
dc.identifier.uri.fl_str_mv http://hdl.handle.net/10400.5/29389
url http://hdl.handle.net/10400.5/29389
dc.language.iso.fl_str_mv eng
language eng
dc.relation.none.fl_str_mv Crépin, Hisguima Dassidi (2023). "Fiscal rules and foreign direct investment in developing countries". REM Working paper series, nº 0299/2023
2184-108X
dc.rights.driver.fl_str_mv info:eu-repo/semantics/openAccess
eu_rights_str_mv openAccess
dc.format.none.fl_str_mv application/pdf
dc.publisher.none.fl_str_mv ISEG - REM - Research in Economics and Mathematics
publisher.none.fl_str_mv ISEG - REM - Research in Economics and Mathematics
dc.source.none.fl_str_mv reponame:Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)
instname:Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informação
instacron:RCAAP
instname_str Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informação
instacron_str RCAAP
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reponame_str Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)
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repository.name.fl_str_mv Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) - Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informação
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