Description: Improvements in the World Bank’s Ease of Doing Business Rankings : Do they Translate into Greater Foreign Direct Investment Inflows?

Cover Image

QR Code

Improvements in the World Bank’s Ease of Doing Business Rankings : Do they Translate into Greater Foreign Direct Investment Inflows?

The World Bank's Ease of Doing Business reports have been ranking countries since 2006. However, do improvements in rankings generate greater foreign direct investment inflows? This study is the first to test such a proposition empirically wit...

Full description

Bibliographic Details
Main Author:	Jayasuriya, Dinuk
Language:	English
Published:	2012
Subjects:	ACCOUNT ACCOUNTS BOND BUSINESS ENVIRONMENT BUSINESS INDICATORS BUSINESS TAXES CAPITAL FLOWS CAPITAL MARKETS COUNTRY FIXED EFFECTS CURRENCY CURRENCY DEPRECIATION DETERMINANTS OF GOVERNANCE DEVELOPING COUNTRIES DEVELOPING COUNTRY DIVIDEND DOUBLE TAXATION DUMMY VARIABLE ECONOMIC DEVELOPMENT EMERGING ECONOMIES EMERGING MARKET EMERGING MARKETS EXCHANGE RATES EXTERNAL INVESTORS FINANCE CORPORATION FINANCIAL CRISIS FINANCIAL MARKETS FOREIGN DIRECT INVESTMENT FOREIGN DIRECT INVESTMENTS FOREIGN FIRMS FOREIGN INVESTMENT GLOBAL ECONOMY GOVERNANCE INDICATORS GOVERNANCE RANKING GOVERNANCE RANKINGS HOST COUNTRY INCOME INCOME TAXES INFLATION INFLATION RATE INSTITUTIONAL ENVIRONMENT INSTRUMENT INTERNATIONAL BANK INTERNATIONAL ECONOMICS INTERNATIONAL FINANCE INTERNATIONAL FINANCIAL MARKETS INTERNATIONAL TRADE INVESTMENT CLIMATE INVESTOR PROTECTION JUDICIAL INDEPENDENCE LEGAL RIGHTS LEGAL SYSTEM LEGAL SYSTEM EFFICIENCY LOCAL FINANCIAL MARKETS LOW-INCOME COUNTRIES MACROECONOMIC VARIABLES MARKET SIZE MONETARY FUND MULTINATIONAL ENTERPRISES POLITICAL STABILITY POVERTY ALLEVIATION PRIVATE PROPERTY PROPERTY RIGHTS REAL EXCHANGE RATE RULE OF LAW SOCIAL CAPITAL TAX TAX RATES TAXATION POLICY TRADING TRANSITION ECONOMIES VALUATION WORLD ECONOMY
Online Access:	http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20110906093409 http://hdl.handle.net/10986/3550

Description
Summary:	The World Bank's Ease of Doing Business reports have been ranking countries since 2006. However, do improvements in rankings generate greater foreign direct investment inflows? This study is the first to test such a proposition empirically with Arellano-Bond dynamic panel estimators using the official rankings from 2006 to 2009. The paper shows this relationship is significant for the average country. However, when the sample is restricted to developing countries, the results suggest an improved ranking has, on average, an insignificant (albeit positive) influence on foreign direct investment inflows. Although robust, this result should be taken with caution given that it refers to the average developing country using data across a four-year time period. Finally, the paper demonstrates that, on average, countries that undertake large-scale reforms relative to other countries do not necessarily attract greater foreign direct investment inflows. This analysis may have important ramifications for developing country governments wanting to improve their Doing Business Rankings in the hope of attracting foreign direct investment inflows.