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Date

2017-06-29

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In choosing where to invest, firms seek out information on a set of possible locations. Information asymmetries may make country visibility particularly important in decisions to locate investment abroad. We develop a country visibility index based on international news stories in The Economist, and show that broad country visibility is at least as important in attracting foreign direct investment (FDI) as other specific investment promotion activities or proxies for information frictions. Controlling for standard gravity model determinants of FDI, we find that greater visibility of developing countries, in particular lower middle- and low-income countries, increases the investment that they receive from US multinational corporations. This is a postprint of the published article.

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Keywords

Foreign Direct Investment, Information Asymmetries, International News Coverage

Citation

Laurel Adams, Rebecca Neumann & Saleh S. Tabrizy (2018) Is ‘no news’ really ‘good news’? Country visibility and FDI location choice, International Review of Applied Economics, 32:4, 489-524, DOI: 10.1080/02692171.2017.1351925

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