Determinants of FDI and its Impact on BRICS Countries: A Panel Data Approach

This paper examines the impact of factors determining Foreign Direct Investment (FDI) inflows of BRICS countries using annual dataset from the period 1994-2014. The paper proposes to compare the overall trends and factors impact on the FDI in the BRICS countries. The study employs Panel Data analysis and examines the selected variables like Index of Industrial Production (IIP), Gross Domestic Product (GDP), Foreign Exchange Rate (FOREX), Stock Market Capitalization, Infrastructure Index, and Stock Market Turnover ratio. The empirical results are robust in general for alternative variables determining FDI flows. The policy implication of this study is that increasing interest of economic integration around the globe and interdependence of FDI between member's countries is an important feature for maintaining sustainability of growth.