DO CIVIL AND POLITICAL REPRESSION REALLY BOOST FOREIGN DIRECT INVESTMENTS?

Abstract

Multinational enterprises are often accused of having a preference for investing in countries in which the working populations' civil and political rights are largely disregarded. This article presents an empirical investigation of the popular “political repression boosts FDI” hypothesis and arrives at the conclusion that the hypothesis is not supported. On the contrary, multinational enterprises rather appear to be attracted by countries in which civil and political freedom is respected.