Interaction of Economic Freedom and Foreign Direct Investment Globally: Special Cases from Neglected Regions

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Main Authors: Sovbetov, Yhlas, Moussa, Mohamed
Format: Preprint
Published: 2025
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author Sovbetov, Yhlas
Moussa, Mohamed
author_facet Sovbetov, Yhlas
Moussa, Mohamed
contents This paper studies the macroeconomic impact of economic freedom on foreign direct investments inflows in both global and regional panel analyses involving 156 countries through the period of 1995-2016. Unlike to prior literature, it includes often neglected nations such as Fragile and Conflict-Affected states, Sub-Saharan, Oceanian, and Post-Soviet countries. The paper finds a positive impact of economic freedom on FDI under fixed-effects model in global case where a unit change in economic freedom scales FDI inflows up to 1.15 units. More specifically, all 9 regions also refer to positive and significant impact of economic freedom on FDI. The highest impact is recorded in European countries, whereas the lowest ones are documented in Fragile-Conflict affected states, Sub-Saharan zone, and Oceanian countries.
format Preprint
id arxiv_https___arxiv_org_abs_2512_01695
institution arXiv
publishDate 2025
record_format arxiv
spellingShingle Interaction of Economic Freedom and Foreign Direct Investment Globally: Special Cases from Neglected Regions
Sovbetov, Yhlas
Moussa, Mohamed
General Economics
Economics
This paper studies the macroeconomic impact of economic freedom on foreign direct investments inflows in both global and regional panel analyses involving 156 countries through the period of 1995-2016. Unlike to prior literature, it includes often neglected nations such as Fragile and Conflict-Affected states, Sub-Saharan, Oceanian, and Post-Soviet countries. The paper finds a positive impact of economic freedom on FDI under fixed-effects model in global case where a unit change in economic freedom scales FDI inflows up to 1.15 units. More specifically, all 9 regions also refer to positive and significant impact of economic freedom on FDI. The highest impact is recorded in European countries, whereas the lowest ones are documented in Fragile-Conflict affected states, Sub-Saharan zone, and Oceanian countries.
title Interaction of Economic Freedom and Foreign Direct Investment Globally: Special Cases from Neglected Regions
topic General Economics
Economics
url https://arxiv.org/abs/2512.01695