Foreign Direct Investment and Democracy: A Robust Fixed Effects Approach to a Complex Relationship

Vincenzo Verardi, Rodolphe Desbordes

Research output: Contribution to journalArticle


We develop a new robust-to-outliers dummy estimator that we subsequently apply to investigate the impact of various democratic attributes on foreign direct investment in recent years. We find that democracy has generally a positive impact on foreign direct investment, once outliers are controlled for, but that this relationship is very specific to each host country's characteristics.

Original languageEnglish
Pages (from-to)43-82
Number of pages40
JournalPacific Economic Review
Issue number1
Publication statusPublished - 1 Feb 2017


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