Abstract
This study empirically explores the determinants of foreign direct investment for 21 middle-income countries by utilizing the generalized methods of moments estimation model. Empirical results from the annual data during 1997 to 2016 show that the continuous increase in the annual production of goods and services, together with the persistent flows of foreign direct investments are important drivers of more foreign investment inflows to middle-income countries. Enhancing growth performance will likely induce increased flows of foreign investment to middleincome countries. In contrast, unemployment proves to be a negative and insignificant driver of foreign direct investment. Furthermore, after controlling for the level of development amongst the countries, an increase in access to electricity is found to result in more FDI flows into upper middle-income countries than to the lower middle-income countries.
M.Com. (Development Economics)