Macroeconomic Factors Affecting FDI Inflows into Emerging Economies—A Panel Study

The study checks for empirical evidence in determining the significant factors in explaining the FDI inflows into the ten big emerging economies and seven other emerging economies for the period 2000–2017. Macroeconomic and open economy factors are used to verify whether they have any significant impact on FDI inflow. Causal effects are also checked for each of these variables towards FDI inflow into the emerging economies. Capital formation, GDP growth rate, size of the economy, LFPR, foreign exchange reserves and savings are found to cause FDI inflows into the emerging economies. Interest rate, LFPR, debt, savings, GDP growth rate and inflation are found to have statistically significant effect on FDI inflows.