摘要：This paper analyzes a range of host country characteristics that
determine foreign direct investment (FDI) flows to developing countries, using
panel data on 72 countries for the period 1970-2008. Keeping in view the
endogeneity problem of the chosen host country’s characteristics, the model is
estimated using the General Method of Moments (GMM) technique. The
analysis shows that gross domestic product (GDP), economic growth, and per
capita income positively affect FDI—a result consistent with the market-
seeking behavior of multinational corporations (MNCs). Furthermore, we find
that remittances have a significant and positive impact on FDI. On the
other hand, inflation and the balance of payments deficit have negative
effects on FDI. MNCs are attracted to host countries that are outward
looking and follow trade-promoting policies. This is confirmed by the
positive effect of openness on FDI flows to developing countries. The study
also finds that the effect of military expenditures on FDI is negative and
significant. Finally, our analysis finds that the real exchange rate has a
significantly negative impact on FDI.
