Foreign Direct Investment (FDI) Indexes: Relevance for Emerging Economies

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Author(s): J. Zambujal-Oliveira (University of Madeira, Portugal)and José Pestana-Amaral (Instituto Superior Técnico, Portugal)
Copyright: 2023
Pages: 20
Source title: Analyzing International Business Operations in the Post-Pandemic Era
Source Author(s)/Editor(s): Bryan Christiansen (The Christiansen Foundation, USA)and John D. Branch (University of Michigan, USA)
DOI: 10.4018/978-1-6684-3749-0.ch007

Keywords: Business & Management / Business Science Reference / Global Business

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Abstract

As the foreign direct investment (FDI) attractiveness indexes constitute one of the decision tools for governments' politics, it is relevant to assess the Groh and Wich Index (GWI). The main purpose is to verify the capacity of this index to replicate the phenomena of inflow FDI. The index analysis process included reviewing literature and detecting weaknesses on theoretical frameworks and in the selection of basic indicators. Multivariate analysis, applied to a sample of economies, showed evidence that some composite indicators of the GWI have shortages of concordance between simple indicators. Apart from showing that FDI attractiveness index of Groh and Wich does not convey the progress of inflow FDI, the study demonstrates that a FDI attractiveness index built to advanced economies can hardly be employed to developing economies without significant changes to the basic indicators.

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Foreign Direct Investment (FDI) Indexes: Relevance for Emerging Economies

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