The Determinants of Foreign Direct Investment in Services

This paper has two main objectives: first, to consider country specific determinants that attract services FDI, and second, to compare the importance of these determinants vis-a-vis the traditional determinants that attract manufacturing FDI. Using the OECD countries as our sample, and 1980 to 2003 as our time period, we consider the determinants of inward FDI in a panel setting. Our results provide empirical evidence to support the view that services FDI follow their counterparts in the manufacturing sector