The overstatement of foreign direct investment (FDI): empirical evidence from night time light data

Le résumé fourni par la source

This study examines the tendency of less democratic regimes to exaggerate economic achievements, focusing on reported Foreign Direct Investment (FDI) growth. Using night-time light (NTL) data as an objective alternative, the research detects discrepancies in reported FDI growth, often manipulated by governments. Analysis reveals a strong link between autocratic regimes and inflated FDI growth, even after controlling for fixed and time-varying country characteristics. The study identifies mechanisms driving this exaggeration, such as infrastructure, human capital, innovation, and local financial markets. These findings reinforce existing research on FDI inflation under authoritarian regimes, highlighting the importance of democratic institutions in curbing data manipulation and advocating for alternative economic measures to reduce reliance on potentially distorted official statistics.

Ce résumé expose les affirmations des auteurs. BNTIC ne l’interprète pas comme une validation indépendante des résultats.