Foreign Direct Investment and Political Risk in Pacific Rim

Main Article Content

Mehdi Behname

Abstract

The main purpose of this article is to study the effect of political risk on foreign direct investment in the Pacific Rim. The considered time period is from 1984 to 2008. In this study, 12 indexes of political risk offered by Political Risk Services Group have been used. After studying the stationarity of variables by Im-Pesaran Shin test, the benchmark model is estimated for 12 political risks and we come to the conclusion that the risks of Corruption, External Conflict, Internal Conflict, Investment Profile, and Military in Politics have significant effect on FDI.


 

Article Details

Section
Articles

References

Behname, Mehdi. 2008. Les stratégies de la localisation d'entreprise et la réactualisation de la politique industrielle: étude appliquée a la France, Thèse de doctorant a l'Université de la Sorbonne nouvelle.
Behname. 2011a. „Studying the Effect of Foreign Direct Investment on Economic Growth in Greater and Traditional Middle East Countries”. Journal of Economic Analysis, 45(3-4): 35-43.
Behname. 2011b. “Determinants of foreign direct investment in Iran”, Management and Economics conference, Iran, Miane.
Brunetti, A. and B. Weder. 1998. “Investment and institutional uncertainty: a comparative study of different uncertainty measures.” Weltwirtschaftliches Archiv 134, 513–533.
Busse, Matthias and Carsten Hefeker. 2007. “Political risk, institutions and foreign direct investment.” European Journal of Political Economy, 23: 397–415.
Butler, K., and D. Joaquin. 1998. “A note on political risk and the required return on foreign direct investment.” Journal of International Business Studies, 29: 599–608.
Costantini, Valeria & Chiara Martini. 2010. "The causality between energy consumption and economic growth: A multi-sectoral analysis using non-stationary cointegrated panel data." Energy Economics, Elsevier, 32(3): 591-603.
Hausmann, R., and E. Ferna´ndez-Arias. 2000. “Foreign direct investment: good cholesterol?”. Working paper 417.
IMF. 2012, http://www.imf.org/external/data.htm.
Robock, S. H. 1971. “Political Risk: Identification and Assessment”. Columbia Journal of World Business, 6:4(6-20).