The Rule of Law and Foreign Direct Investment

Abstract

Foreign Direct Investment (FDI) plays an import role in economic growth. Using international panel data, this paper investigates the effects of Rule of Law on FDI inflows. The research shows that the Rule of Law has positive effects on inward FDI, and Absence of Corruption, Effective Regulation Enforcement, and Open Government are the most significant factors of Rule of Law to facilitate FDI.