The Effect of Property Rights on Foreign Direct Investment - A panel data study of the period between 1970 and 2005

Abstract: This paper studies the importance of property rights when investigating the determinants of foreign direct investment. Property rights are difficult to measure and its relation to foreign direct investment has not been examined that much in previous researches. This paper examines the effect of some independent variables and property rights on foreign direct investment by using panel data for 127 countries, between 1970 and 2005. Several models are used in order to investigate the correlation between the dependent and the independent variables. In nearly all models, property rights show a significant positive correlation with foreign direct investment.