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The Independent Institute
Working Paper #36

Do Civil and Political Repression Really Boost Foreign Direct Investments?


Abstract: Multinational enteprises are often accused of having a preference for investing in countries in which the working populations' civil and political rights are largely disregarded. This paper presents an empirical investigation of the popular "political repression boosts FDI" hypothesis and arrives at the conclusion that the hypothesis is not supported. On the contrary, multinational enteprises rather appear to be attracted by countries in which civil and political freedom is respected.