Ease of doing business and FDI inflow to Sub‐Saharan Africa and Asian countries

Ease of doing business and FDI inflow to Sub‐Saharan Africa and Asian countries Purpose – The purpose of this paper is to investigate the relationship between factors that influence conducting business and the inflow of foreign direct investment (FDI) to Sub‐Saharan African (SSA) and Asian countries. Design/methodology/approach – The factors of business climate defined by the World Bank in 2006 as ease of doing business were correlated with FDI flows to SSA and Asian countries. Findings – Two factors, “registering property” and “trading across borders”, were found to be related to FDI over all six years of the study (2000‐2005) for the combined sample. Also, several factors were found to be related to FDI received by SSA and Asian countries during various years. Research limitations/implications – A limitation of the study is that the sample included only SSA and Asian countries. Practical implications – The findings may help SSA and other countries to improve the business climate in terms of the factors of ease of doing business, in order to attract more FDI. Originality/value – The paper provides empirical support to the hypothesis that FDI is related to some of the factors of the business climate. It advances understanding of the determinants of the inflow of FDI to African and Asian countries and may be particularly useful to international organizations seeking to do business in SSA and Asian countries. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Cross Cultural Management: An International Journal Emerald Publishing

Ease of doing business and FDI inflow to Sub‐Saharan Africa and Asian countries

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Publisher
Emerald Publishing
Copyright
Copyright © 2011 Emerald Group Publishing Limited. All rights reserved.
ISSN
1352-7606
DOI
10.1108/13527601111179483
Publisher site
See Article on Publisher Site

Abstract

Purpose – The purpose of this paper is to investigate the relationship between factors that influence conducting business and the inflow of foreign direct investment (FDI) to Sub‐Saharan African (SSA) and Asian countries. Design/methodology/approach – The factors of business climate defined by the World Bank in 2006 as ease of doing business were correlated with FDI flows to SSA and Asian countries. Findings – Two factors, “registering property” and “trading across borders”, were found to be related to FDI over all six years of the study (2000‐2005) for the combined sample. Also, several factors were found to be related to FDI received by SSA and Asian countries during various years. Research limitations/implications – A limitation of the study is that the sample included only SSA and Asian countries. Practical implications – The findings may help SSA and other countries to improve the business climate in terms of the factors of ease of doing business, in order to attract more FDI. Originality/value – The paper provides empirical support to the hypothesis that FDI is related to some of the factors of the business climate. It advances understanding of the determinants of the inflow of FDI to African and Asian countries and may be particularly useful to international organizations seeking to do business in SSA and Asian countries.

Journal

Cross Cultural Management: An International JournalEmerald Publishing

Published: Oct 25, 2011

Keywords: Sub Saharan Africa; Asia; International investments; International business; Business climate; Determinants of FDI

References

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