RT Journal Article
SR Electronic
T1 Natural Disasters and Foreign Direct Investment
JF Land Economics
JO Land Econ
FD University of Wisconsin Press
SP 346
OP 363
DO 10.3368/le.87.2.346
VO 87
IS 2
A1 Escaleras, Monica
A1 Register, Charles A.
YR 2011
UL http://le.uwpress.org/content/87/2/346.abstract
AB The world’s population has witnessed the concurrence of two powerful global trends: an unprecedented growth in foreign direct investment (FDI) and an increase in natural disasters. Since investment decisions are based on an evaluation of expected risks and returns, we consider whether FDI decisions are influenced by natural disasters. We do so by considering the relation between FDI in 94 countries between 1984 and 2004 and the number of disasters striking those countries. Across a variety of empirical tests that control for two-way fixed effects we find natural disasters to be negatively and statistically significantly associated with a country’s FDI. (JEL Q54)