Essay about Foreign Direct Investment (FDI) and Political Institutions

Essay about Foreign Direct Investment (FDI) and Political Institutions

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How do political institutions affect foreign direct investment?
The field of International Political Economy (IPE) have seen a tremendous amount continuous change in both the past and recent time. The climate and conditions within the theoretical and practical aspects of the field are ever-changing and have led to a volatile political and economic landscape to form. This essay will focus on one aspect of IPE that have relatively quickly risen to become imperatively influential and important for the developments in the field, that aspect is Multinational Companies (MNC) and their Foreign Direct Investments (FDI). MNC’s role and the importance of FDI are multifaceted within the international sphere; the use of FDI does not only constitute possible cuts in production cost and increased revenue for the investor but FDI is today an important aspect for state economies as well. FDI does today represent a large part of many states’ GDP and is also a vital part in progressing economic growth and development the developing world.
The dynamics of FDI are complex, the involved actors; MNC’s and state governments act within different perimeters. The aims and goals of the involved actors are not always in sync but the outcomes might be beneficial for both despite this. Numerous studies have throughout the time been conducted on the dynamics of FDI. This essay will focus on the role of domestic and international institutions in relation to FDI. What role does institutions plays in attracting FDI, does certain types of institutions succeed in attracting more FDI than others and why the situation is so, are central questions to assess to understand the relations of MNC’s, FDI and states. The analysis will focus on three different dimensions of...

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OECD Statistics
FDI Inflows, Russian Federation. Available at: [accessed 14 January 2014]
OECD Country Risk Classifications of the Participants to the Arrangement on Officially Supported Export Credits. Available from: [accessed January 15 2014]

UNCTAD Statistics
FDI Inflows, Available from: [accessed January 17 2014]

World Bank Statistics
Statistics of FDI Inflows. Available from: [accessed January 14 2014]

Brunei | Freedom House. 2014 [ONLINE] Available at: [Accessed 16 January 2014].

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