This article is the first to show that foreign investors care about economic freedoms, rather than political freedoms, in making decisions about where to locate capital. Hence more democratic countries may receive less Foreign Direct Investment (FDI) flows if economic freedoms are not guaranteed.

When candidates flip-flop, their poll numbers suffer, but when countries flip-flop, entire economies suffer. This scenario is playing out in India after the government flip-flopped on its decision to allow retail giants such as Wal-Mart to own a majority 51% stake in joint operations with a local partner.

To combat the economic malaise, the Obama administration is bending over backward to encourage companies to create jobs in America. So why is the White House - and the Congress - challenging Huawei, a high-tech firm eager to invest and compete in the U.S. market? 

Where is the Indian political grouping that emphasises growth over equity, seeks equality of opportunity rather than outcome, celebrates the private sector as an engine of economic prosperity, and champions the cause of a strong military?

Chinese telecom-equipment maker Huawei has become a global corporate giant, yet security concerns from US officials have kept it from gaining a foothold in America, intensifying US-China tensions. In a time of great economic need, US desire for foreign direct investment from China is clashing with fears over cyber attacks from organizations suspected to be under Beijing’s influence.

How are factors such as corruption perception and the level of democracy influencing foreign direct investment to developing economies?

Abstract

Foreign direct investment in the United States boomed in the late 1980s. Some have attributed this rise to the Tax Reform Act of 1986, which by discouraging investment by domestic firms may have provided opportunities for foreign firms not as strongly affected by the U.S. tax changes. We challenge this...

The bill from years of backward governance may at last be coming due.