Abstract:

This study examines the country-specific factors that directly influenced foreign investments in 27 emerging market economies in the period 2000-2015. The panel regression method is used. The panel regression results show that by the review period, the volume of the market, the degree of external transparency, the infrastructure and political stability have a positive impact on foreign direct investments towards emerging market economies, and the macroeconomic instability and the global financial crisis have a negative impact. However, there is no meaningful relationship between labour costs and foreign direct investments. The findings show that countries with higher per capita income levels, open to foreign trade, with solid infrastructure and macroeconomic stability are the center of attraction for foreign direct investments. Furthermore, progress in the country’s legal system and property rights has a direct positive impact on foreign investments.

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