Institutional Determinants of Foreign Direct Investment: Evidence from OECD Countries

Economic and institutional determinants of foreign direct investment are analyzed for 29 OECD countries. In the study, twelve subcomponents are used such as investment pro le, corruption, law and order, bureaucratic quality and government stability which can give information about political risk and institutional quality of the countries. According to results; main determinants of foreign direct investment in OECD countries are institutional factors like government stability, socioeconomic condition, investment pro le, internal con ict, military in politics, religious tensions, law and order, ethnic tensions and bureaucratic quality rather than economic determinants. Our ndings indicate that a good institutional structure plays an important role in attracting foreign direct investment in OECD countries