The global flows of foreign direct investment (FDI) to Africa have increased steadily in recent years but the research on what determines the location of these investments is scarce. Research focusing on FDI flows from small and open economies such as Sweden is even more uncommon. From the locational factors found in the OLI paradigm we developed a model that was tested on a dataset of 25 African countries over the period of 2007 to 2010. The model proved inadequate in explaining the African inward FDI flows from Sweden. However, it well explains the aggregated inward FDI flows from firms around the world to Africa. Our results implies that the locational determinants derived from the OLI paradigm are inadequate in explaining Swedish FDI flows to Africa and maybe even in explaining flows from a small and open economy to developing countries. The answer to the question of what locational determinants are important for Swedish companies investing in African countries should perhaps be sought for elsewhere.

This thesis investigates why and how macroeconomic volatility in source countries interacts with their FDI outflows. The study focuses on FDI flowing out from OECD countries to less developed countries in the ASEAN region. Using a panel data encompassing 52 country-pairs over the period 1996-2011, I find a negative correlation between FDI outflows and macroeconomic volatility in source countries. More specifically the empirical results suggest an adverse relationship between inflation and output volatility (business cycles fluctuations) and FDI flows – the more macroeconomic volatility in developed economies the lesser FDI flows to less developed economies, which is explained by Keynesian theories. These findings derive from a gravity model approach, which enabled me to control for host country determinants. In order to estimate these relationships I adopted a random effects model and a tobit model. The reason behind the use of these two models derives from the different views within this branch of research because of censored FDI statistics. The thesis is inspired by Éric Rougier’s et al. work on how macroeconomic volatility in European countries interacts with FDI flows to the MENA region (2012).

One of the major factors that affect economic growth is FDI - Forgein Direct Investment. BRICS is a newly formed trade bloc that includes 5 of the largest, most heavily populated, and most emerging economies in the world, their economies share various characteristics, yet they also have various differences. The purpose of the thesis is to find the determinants of FDI in this trade bloc. Those determinants were specifically chosen based on multiple accredited previous literature. In this thesis a panel data regression is performed for these 5 partners with data ranging from 1995 to 2018. The results of the thesis were both predicted and surprising, as two determinants were in accordance with the past literature, however the other two  determinants had other results, both of these variables had opposite signs compared to their predicted signs that were expected from the chosen previous literature. Our research tries to answer the question of how do these determinants affect FDI inflows, in order for countries to make strategies to attract it.