Kiel Working Papers, Kiel Institute for World Economics
No 1755:
What Drives FDI from Non-traditional Sources? A Comparative Analysis of the Determinants of Bilateral FDI Flows
Maximiliano Sosa Andrés, Peter Nunnenkamp and Matthias Busse
Abstract: Non-traditional source countries of FDI play an
increasingly important role, notably in developing host countries. This
raises the question of whether the determinants of FDI differ
systematically between traditional and non-traditional source countries. We
perform Logit and Poisson Pseudo Maximum Likelihood estimations drawing on
UNCTAD’s database on bilateral FDI flows, including various emerging and
developing countries as sources of FDI outflows. We find that economic
geography variables are more relevant for FDI from non-traditional sources,
while non-traditional investors appear to be as risk adverse as traditional
investors. Access to raw materials represents a less important driving
force of FDI from non-traditional sources. The differences are less
pronounced for other types of FDI
Keywords: FDI flows, types of FDI, source-host country pairs, location choices, gravity-type models; (follow links to similar papers)
JEL-Codes: F21; (follow links to similar papers)
35 pages, January 2012
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