Does legal origin affect Swedish FDI? An empirical analysis

Abstract: In this paper we examine the effects of legal origin as a determinant for allocation of Swedish outward FDI. The study is conducted using a panel comprising 33 countries over the years 2000 to 2011. Our results indicate a relationship between legal origin and the proportion of Swedish direct investments an economy receives. Furthermore, the study provides significant results specifying the preferences of legal origins when Swedish firms decide to invest abroad. The study implies that a larger portion of Swedish FDI flows to nations with French civil law than common law, followed by German civil law.