Outlier, Measurement, and the Democracy-FDI Controversy
Bibliographic Data
| ID | 12802477 |
|---|---|
| Authors | Quan Li (0000-0003-4734-7709, corresponding author) |
| Year | 2009 |
| Volume | 4 |
| Issue | 2 |
| Pages | 167-181 |
| Publication date | 2009-07-07 |
| Peer Reviewed | Yes |
| Open Access | No |
| Type | ARTICLE |
| Venue | Quarterly Journal of Political Science (JOURNAL) |
| Journal identifiers | ISSN: 1554-0626 • E-ISSN: 1554-0634 |
| Publisher | Now Publishers (PUBLISHER • NL) |
| DOI | 10.1561/100.00009028 |
| OpenAlex | W2026300238 |
| Language | EN |
| Citations received | 33 |
| References cited | 14 |
Choi (2009) offers a useful demonstration that Li and Resnick’s (2003) analysis of the effect of regime type on foreign direct investment (FDI) inflows is vulnerable to the impact of outliers. However, his first remedial method of controlling for outliers with a dummy variable leads to qualitatively the same findings of Li and Resnick. His second remedial method, a robust regression estimator, drops 80 observations and its result on democracy contradicts the finding from median regression. Choi claims that the origin of the outlier problem in Li and Resnick is the inappropriate operationalization of the concept: FDI inflows. Analysts should choose FDI/GDP over net FDI inflows. This research demonstrates how scholars often conflate the two measures conceptually and empirically. Fundamentally, FDI/GDP reflects a country’s openness to or reliance on foreign capital whereas net FDI inflows indicate the amount of investment. Based on FDI/GDP, scholars cannot draw correct inferences about the impact of democracy on the amount of foreign investment. Hence, conclusions in several published studies have to be revised and corrected. One promising solution for outliers in FDI data is to log-transform net FDI inflows. This research has important implications not only for resolving the democracy-FDI controversy but also for studies of other causes of FDI flows
Capital (architecture · Democracy · Economics · Foreign direct investment · Geography · International economics · International trade · Macroeconomics · Openness to experience · Operationalization · Outlier · Political science · Politics · Productivity · Statistics · Global trade and economics · International Business and FDI · International Development and Aid · Mathematics
Dictators’ facial characteristics and foreign direct investment
Curse of friendship
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Autocratic time horizons and the growth effect of foreign direct investment
Jobs first, environment second
Labor Rights and Foreign Direct Investment
Credibility and Flexibility
The Politics of Foreign Direct Investment in Authoritarian Regimes
Political turnover, regime type, and investment behavior
The Catalytic Effect of IMF Lending
Foreign Direct Investment and Institutional Diversity in Trade Agreements
International Finance and Central Bank Independence
The effects of state aid policy trade-offs on FDI openness in Central and Eastern European Countries
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Economic Actors as Human Rights Watchers
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Types of foreign finance and slum upgrading
The curse of Covid-19 on foreign direct investment
The Political Economy of FDI in Latin America 1986–2006
Democratic Persistence and Inequality
The Relationship between Democracy and Foreign Direct Investment in East Asia
Property Rights Regimes, Technological Innovation, and Foreign Direct Investment
International Capital and Subnational Politics
A Hierarchy of Preferences
Foreign Direct Investment, Commitment Institutions, and Time Horizon
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Political institutions and FDI inflows in autocratic countries
The Political Power of Organized Labor and the Politics of Foreign Direct Investment in Developed Democracies
The economic benefits of justice
Economic Reforms and Inflows of Foreign Direct Investment in Latin America
The Effect of Outliers on Regression Analysis
Political Risk, Democratic Institutions, and Foreign Direct Investment
What Attracts Foreign Investors? An Examination of Human Rights and Foreign Direct Investment
Democracy, Autocracy, and Tax Incentives to Foreign Direct Investors
Economic Policy, Institutions, and Capital Flows
Democratic Governance and Multinational Corporations
Reversal of Fortunes
Democracy, Autocracy, and Expropriation of Foreign Direct Investment
The Politics of Foreign Direct Investment into Developing Countries
What To Do (and Not to Do) with Time-Series Cross-Section Data
| Unique citing works | 33 |
|---|---|
| Citations per year | 2,2 |
| Citation span | 2011 - 2026 (16) |
| Citation velocity | current |
| Highly cited | No |
| Citation types | Neutral: 33 |