Effects of Autocracy and Democracy on FDI's Inflows

This study aims to examine the effect of Autocracy and Democracy on Foreign Direct Investment (FDI) inflows in 15 Asian developing countries. For empirical examination, this study used panel data over the period 1995 to 2015 by employing dynamic panel data. The study shows a significant and positive relationship with autocracy and significant and negative relation with democracy. The empirical finding suggests that the country can attract more FDI in the presence of more autocratic institutions and less democratic institutions. Among the controlling variables trade, market capitalisation, population and literacy rate are significant with democracy while trade becomes insignificant with the main variable democracy.