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The Rule of Law and U.S. Direct Investment Abroad

This paper employs an augmented gravity model for a sample of 96 host countries to examine the impact of host country rule of law on direct investment from the United States. This paper further investigates the gap between property rights and freedom from corruption, the two primary components of a country’s rule of law. Property rights and freedom from corruption are both shown to have a significant positive effect on U.S. outward foreign direct investment. This thesis argues that freedom from corruption is a more powerful measure than property rights for determining the location of U.S. direct investment. This suggests that for host countries, reducing the level of corruption may be more effective at stimulating direct capital investment from U.S. investors than expanding property rights.

Identiferoai:union.ndltd.org:CLAREMONT/oai:http://scholarship.claremont.edu/do/oai/:cmc_theses-1640
Date01 January 2013
CreatorsPetit, Elizabeth J
PublisherScholarship @ Claremont
Source SetsClaremont Colleges
Detected LanguageEnglish
Typetext
Formatapplication/pdf
SourceCMC Senior Theses
Rights© 2013 Elizabeth J. Petit

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