Journal Press India^®

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This paper aims at investigating the role of cultural, administrative, geographical, and economic factors in explaining the bilateral differences in FDI inflows across fifteen emerging economies at the macroeconomic level following the CAGE (cultural, administrative, geographical, and economic) framework in the year 2013 based on multiple regression approach. In this analysis, bilateral FDI inflows for fifteen emerging countries has been considered as the dependent variable, which is drawn from the United Nations Conference on Trade and Development (UNCTAD), and independent variables are considered as CAGE factors taken from different sources such as CEPII, Ethnologue, FDI database, etc. The empirical results show that the three CAGE distance viz., cultural, administrative, economic factors are statistically significant in explaining variation in FDI inflows across these countries. This study has found all the six governance indicators in different forms as a part of administrative distance factors are also statistically significant.

Keywords

FDI inflows; Emerging market economies; CAGE framework; governance indicators

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