Governance Institutions and FDI: An empirical study of top 30 FDI recipient countries

The rise in the world FDI inflows 1980 onwards has led to numerous research studies evaluating the factors that make a country an attractive FDI destination for investors. Although there is a lot of research work looking into the factors that affect FDI inflows, still very few studies have looked into the institutional environment of a country affecting FDI. Filling this research gap, this study aims to study the impact of World governance indicators on the FDI inflows of the country. The analysis leads us to conclude that out of six governance institutional indicators of WGI, only ‘better control of corruption' and ‘better regulatory quality' of a country leads to higher FDI inflows to the country.