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Governance effectiveness and regulation quality have been drawing the attention in the international business arena, yet, there has not been a consensus findings regarding its potential impact on the FDI inflows. In this paper, we examine the possible links between the governments’ effectiveness and their regulation quality and the amount of FDI inflows using the existing literature and theories in the economic and international business fields. We find that regulation quality, control of corruption, and trade openness have mixed results, suggesting that further exploration is needed in this field. Results are explained and future directions are suggested based upon the empirical findings.

Governance, Regulations, Trade Openness and FDI Inflows: Empirical Study