Determinants of Foreign Direct Investment in Cyprus

  • Bagher ASGARNEZHAD NOURI
  • Milad SOLTANI

Abstract

Foreign direct investment (FDI) is considered one of the main causes of economic development and growth in
host countries, and it has followed an increasing trend over recent decades. Identifying the factors instrumental in
attracting foreign direct investment policy in various countries, especially in developing countries, which have
failed to make good use of this factor, can be useful. The present study was an attempt to investigate factors
influencing FDI in Cyprus as one of the developing countries in Europe. The data were collected during 1995-
2015 period. The hypotheses were estimated using the vector error correction model. The results demonstrated
that rate of capital return, degree of economic openness, liquidity, tax rate; market size, infrastructure, human
capital, and economic growth rate have a significant effect on foreign direct investment in Cyprus. However, other
independent variables, i.e. government expenditure, inflation rate, and exchange rate do not have a significant
effect on foreign direct investment.
Published
2016-05-10
How to Cite
ASGARNEZHAD NOURI, Bagher ; SOLTANI, Milad . Determinants of Foreign Direct Investment in Cyprus. Journal of Advanced Research in Law and Economics, [S.l.], v. 7, n. 2, p. 341-352, may 2016. ISSN 2068-696X. Available at: <https://journals.aserspublishing.eu/jarle/article/view/221>. Date accessed: 14 apr. 2024.
Section
Journal of Advanced Research in Law and Economics