Relationship between Economic Freedom and Foreign Direct Investment: Panel Cointegration Analysis

Emrah Sofuoglu, Oktay Kızılkaya () and Dogan Uysal
Additional contact information
Emrah Sofuoglu: Ahi Evran University
Dogan Uysal: Celal Bayar University

Business and Economics Research Journal, 2019, vol. 10, issue 2, 341-355

Abstract: Economic freedoms have recently become one of the most important institutional indicators that attracted the attention of researchers. The level of economic freedom of a country is thought to be an important factor in attracting investments. This study aims to examine the relationship between economic freedom and foreign direct investment. In this context, countries need to establish efficient policies for economic freedoms to increase foreign direct investments. To this extent, most attractive foreign direct investment countries (The U.S, Hong Kong, China, Ireland, Netherlands, Switzerland, Singapore, Brazil, Canada and India) are investigated in the study. The study covers the period 1995-2015 and Pedroni cointegration test, panel FMOLS and panel DOLS methods are utilised to determine the relationship between the variables. According to analysis findings, there is a long-term relationship between economic freedom and foreign direct investment. In addition, both panel FMOLS and DOLS results indicate that economic freedom has a positive impact on foreign direct investment in the long term. These findings are evaluated and some policy recommendations are suggested in the conclusion part.

Keywords: Economic Freedom; FDI; FMOLS; DOLS; Panel Data Analysis (search for similar items in EconPapers)
JEL-codes: C23 F14 F49 (search for similar items in EconPapers)
Date: 2019
References: Add references at CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed

Downloads: (external link)
https://www.berjournal.com/relationship-between-ec ... integration-analysis Full text (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ris:buecrj:0394

Access Statistics for this article

Business and Economics Research Journal is currently edited by Adem Anbar

More articles in Business and Economics Research Journal from Uludag University, Faculty of Economics and Administrative Sciences Contact information at EDIRC.
Bibliographic data for series maintained by Adem Anbar ().