Measures to Attract FDI

Foreign direct investment (FDI) is attracted into countries for different reasons. At a general level, in order for a country to be more attractive to investors, there is a need to create an enabling environment by reducing so-called hassle costs. But what are these costs? A new study involving 32 developing economies indicates there exists a statistically and economically significant negative nexus between administrative costs and FDI to GDP ratio after controlling for other factors.