The Environmental Determinants of Foreign Direct Manufacturing Investment: An Ex Post Empirical Analysis

Abstract

This article uses the techniques of quantitative cross-national research to explore the relationship between foreign direct investment (FDI) and the economic, social, and political aspects of the environment. Although a strong relationship is found between flows of FDI and market related variables, no relationship can be established between FDI and variables based upon political event data. The findings are consistent with a view of political discontinuities as necessary but not sufficient conditions for business risk.