Determinants of Foreign Direct Investment (FDI)

Abstract

This study aims to identify the determinants of FDI from previous literature. It can be concluded that infrastructure can have a positive effect on FDI. It can also conclude that trade openness can cause FDI to escalate. Inflation can give negative results to FDI. Higher inflation may cause the return of FDI to be lower. Hence FDI drops. It can be said that there is a positive and negative link between corruption and FDI inflows. Market size can positively and significantly influence FDI. Therefore, the government should increase market size, infrastructure and trade openness but reduce inflation and corruption to increase FDI.