Title: Factors affecting FDI: a statistical analysis of Asian nations

Authors: Ishita Sethi; Nabh Gupta; Shubham Aggarwal; Neha Saini

Addresses: Sri Guru Gobind Singh College of Commerce, University of Delhi, India ' Sri Guru Gobind Singh College of Commerce, University of Delhi, India ' Sri Guru Gobind Singh College of Commerce, University of Delhi, India ' Sri Guru Gobind Singh College of Commerce, University of Delhi, India

Abstract: Foreign direct investment (FDI) plays a major role in growth and development of the economy, and to support numerous surveys has been conducted showing the change of FDI in recent years (UNCTAD, 2018). The governments of respective countries are also giving benefits to industries bringing heavy amount of FDI to the economy. To analyse factors affecting FDI, independent factors namely GDP, political instability and exports are taken into consideration. From traditional point of view FDI rate was predicted from GDP and exports of the economy (Dunning, 1980, 2001; Hymer, 1976), in our study we introduced political instability, and brings a new factor in the existing analysis which attempts to predict an economy's FDI status in a more efficient manner over a sample of 35 countries. Introducing discriminant analysis to know the statistical significance of FDI to be high/low in a country and later we performed logistic regression analysis to cross verify the obtained results.

Keywords: impact on FDI; GDP; political instability; Asian countries; exports; linear discriminant analysis; LDA; logistic regression.

DOI: 10.1504/IJMCP.2020.112189

International Journal of Management Concepts and Philosophy, 2020 Vol.13 No.4, pp.275 - 291

Received: 01 Jan 2020
Accepted: 21 Aug 2020
Published online: 04 Jan 2021 *

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