# The Effects of Restrictive Measures on Cross-Border Investment: Evidence from OECD and Emerging Countries

Amara Zongo

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Amara Zongo. The Effects of Restrictive Measures on Cross-Border Investment: Evidence from OECD and Emerging Countries. 2021. hal-03432663

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# The Effects of Restrictive Measures on Cross-Border Investment: Evidence from OECD and Emerging Countries

Amara ZONGO

University of Bordeaux, LAREFI, avenue Léon Duguit, 33608 Pessac
amara.zongo@u-bordeaux.fr
Abstract

This paper investigates the effects of global and sectoral restrictive measures on cross-border FDI among 49 advanced and emerging countries. We use a gravity model with panel data from 2010 to 2019 and the FDI Restrictiveness Index of the OECD that quantifies the level of restriction in FDI. Our results suggest that global restrictive measures do not significantly affect cross-border FDI in OECD countries, while restrictions in the service sector have negative and significant effects on FDI. Moreover, the overall restrictive measures and those in the service sector negatively impact inward FDI among OECD and big emerging countries. In addition, restrictions in the services sector impede inward FDI in African countries. Interestingly, restrictions in the secondary sector boost FDI between advanced and African countries, with larger effects for inward investments in African countries. The analysis of disaggregated sectoral restrictive measures shows that restrictions in business and other financial services are negatively associated with intra-OECD FDI, while restrictions in the banking sector have a significant positive impact on FDI. We also find that restrictions in the manufacturing sector have restrictive impacts on inward FDI in big emerging countries, and those in the mining, quarrying, and oil extraction sector hinder inward FDI in African countries. Reforms to liberalize sectoral restrictions by country have positive effects on FDI, but deregulation of the services sector has beneficial effects on inward FDI in all countries.

Keywords: International Trade, FDI stocks, FDI restrictions, Gravity model.

JEL: D25, F10, F14, L51.

**Acknowledgements:** I would like to thank Michel Dupuy, Jean-Marie Cardebat and Mehdi El Herradi for their insightful comments and participants at LAREFI weekly seminar for doctoral students (2019).

**To cite this paper:** ZONGO Amara (2021), The Effects of Restrictive Measures on Cross-Border Investment: Evidence from OECD and Emerging Countries, Bordeaux Economics Working Papers, BxWP2021-09

https://ideas.repec.org/p/grt/bdxewp/2021-09.html

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# I. INTRODUCTION

Foreign direct investment (FDI) has become more and more important in economic growth and globalization in the last years. Indeed, FDI can increase productivity and change the comparative advantage of host countries. The establishment of multinational firms, capital accumulation, or delocalization can reduce unemployment, income inequality, poverty, improve technology transfer, and increase product variety through innovation (Hale and Xu, 2016; Dritsaki and Stiakakis, 2014). The empirical literature suggests a positive correlation between FDI and economic growth (Iamsiraroj and Doucouliagos, 2015). However, several factors determine the massive inflow of FDI into a country and its effectiveness in economic growth (Alfaro et al., 2004; Li and Liu, 2005; Batten and Vo, 2009; Desbordes and Vicard, 2009). A strong macroeconomic framework with competitive and effective policies is necessary and contributes to attracting more FDI into a country (tax rates, restrictions on financial transactions, legal framework, economic and political stability, etc.). Indeed, an investment environment that considers the local institutions, regulations and policies in which companies operate stimulates economic growth by encouraging firms to invest. In this case, regulation has an impact on job creation and sustainability (World Bank, 2005). The positive link between FDI and growth is stronger in open economies with an educated workforce and developed financial markets (Bodman and Le, 2013). Moreover, some analyses have showed the positive link between FDI inflows and low economic policy uncertainty (Gulen and Ion, 2015).

Studies showing the relationship between FDI and regulation suggested that the FDI sector is far less liberalized than trade in goods and services (Ghosh et al., 2012). Although regional, bilateral, and multilateral trade and investment agreements have reduced formal barriers, restrictions are still significant in some countries and affect FDI. The regulatory framework plays a key role in FDI flows. Indeed, regulation has a profound and durable impact on a firm's financial choices and is seen as a crucial driver of investment. To encourage FDI, authorities must reduce the costs, minimize the risks associated with investment, and create an appropriate climate for the domestic economy. Regulation must be both optimal and competitive, protecting investors from potential risks, promoting competition among firms across borders, and protecting consumers from higher prices.

In 2018, inward FDI represented about 2% of GDP in the EU and 1.5% of GDP in all OECD countries (see Figure 1). But we find that investments dropped by 3 to 1% of GDP between 2016 and 2018, which is contrary to the acceleration of GDP and trade growth. These trends are more significant in advanced countries than emerging countries (see Figures 2 and 3). In this year, some 55 economies introduced at least 112 measures affecting foreign investment. Two thirds of these measures sought to liberalise, promote and facilitate new investment (falling since 2016). Almost a third of these measures are new restrictions (increasing since 2016) (UNCTAD, 2019). How can we explain the decline in foreign investment? Is it a consequence of restrictive or sub-optimal policies? What is the real impact of restrictive measures on investment? Have restrictions on investment stimulated capital accumulation in the markets?
<figure><img src="image_4.png" /><figcaption>Figure 1: Inward FDI flows, % of GDP, 2010-2018</figcaption></figure>

Source: OECD database

<figure><img src="image_5.png" /><figcaption>Figure 2: Inward FDI in advanced countries as % of GDP, 2010-2018</figcaption></figure>

Source: OECD database

<figure><img src="image_6.png" /><figcaption>Figure 3: Inward FDI in emerging countries as % of GDP 2010-2018</figcaption></figure>

Source: OECD database

This paper examines the effects of global and sectoral restrictive measures on FDI among 49 advanced and emerging countries from 2010 to 2019. The existing empirical literature on the effects of restrictions on FDI has shown negative impacts of restrictive measures on FDI (Nicoletti et al., 2003; Ghosh et al., 2012). Some studies have underlined the restrictive effects of measures on cross-border M&A in the secondary sector and non-financial services (Gregori and Nardo, 2021). Others have highlighted the negative effects of these measures on cross-border M&A in the services sector (Mistura and Roulet, 2019). Mistura and Roulet (2019) investigate the impacts of restrictions on global inward FDI and cross-border M&A across 60 advanced and emerging countries from 1997 to 2016, and Gregori and Nardo (2021) analyze the effects on EU member countries from 2011 to 2018. Few studies have empirically measured the impact of sectoral restrictive measures on overall inward FDI between advanced and emerging countries.
Our paper contributes to the literature about the effects of restrictive measures on FDI in advanced and emerging countries. However, it is innovative in 3 aspects.

First, similar to Mistura and Roulet (2019), we estimate through an augmented gravity model the effects of restrictive measures on cross-border FDI in 49 developed and emerging countries from 2010 to 2019. We use the OECD FDI Regulatory Restrictiveness Index that captures barriers to FDI entry in 22 economic sectors across 69 countries. The index measures institutional factors that could influence FDI, such as restrictions on equity or key personnel for foreign investors, limitations on the establishment of branches, and clauses on profit and capital repatriation. Moreover Mistura and Roulet (2019) investigate the effects of restrictions on global FDI across advanced and emerging countries in 2001 to 2012 and on M&A from 2001-2016. our paper provides a more recent analysis of the effects of restrictions on global FDI among advanced and emerging countries from 2010 to 2019. It considers the latest international guidelines for compiling foreign direct investment (FDI) statistics.<fnref n="1" /> Second, Mistura and Roulet (2019); Gregori and Nardo (2021) study the effects of different types of restrictive measures on FDI. Our model examines in more details the impact of global and sectoral restrictive measures on cross-border FDI. We consider FDI restrictions in the primary, secondary, and tertiary sectors, and further investigate the more disaggregated sectoral effects. The last contribution relates to the type of country considered. Contrary to Mistura and Roulet (2019), who analyze the effects of restrictions on FDI between OECD and non-OECD countries, we examine these effects at three levels: first, a study on FDI between advanced countries (intra-OECD), then among OECD countries and emerging countries (BRICS and some Latin American and Asian countries), and finally between OECD countries and middle-income countries (North African countries and South Africa).<fnref n="2" /> Indeed, depending on type of economy, the impacts of sectoral measures are different. OECD countries have a more service-oriented economy, emerging countries have a manufacturing and primary sector-based economy and the economy of African countries depends on agriculture and natural resources.

Our results suggest that overall restrictive measures have negative and non-significant effects on cross-border FDI across OECD countries, while restrictions in the service sector have negative and significant effects on FDI. Indeed, an increase of 0.05 points in FDI restrictions in this sector decreases inward FDI by about 17.36%. Moreover, the overall restrictive measures and those in the service sector have negative and significant effects on inward FDI among OECD and emerging countries. An increase of 0.05 points is associated with a decrease in inward FDI respectively by 14.43% for global measures and 31.31% for those in services. In addition, restrictions in the services sector hamper bilateral FDI between OECD and African countries, the effects being more pronounced for African countries. Interestingly, restrictive measures in the secondary sector stimulate FDI between advanced and African countries. The effects are significantly negative for OECD countries, so we can conclude that restrictions in this sector boost inward FDI in African countries. The analysis of disaggregated sectoral restrictive measures shows that restrictions in business and other financial services are negatively associated with intra-OECD FDI and restrictive measures in the banking sector have a positive and significant impact on intra-OECD FDI. A rise of 0.05 points in restrictions in the banking sector is associated with an increase in inward FDI by 28.30% on average. The

<footnote n="1">¹In 2014, many countries implemented the latest international guidelines for compiling foreign direct investment (FDI) statistics (OECD, 2015).</footnote>

<footnote n="2">²The countries with FDI restrictive measures data available in our sample are North African countries and South Africa.</footnote>
restrictive measures in the manufacturing sector have restrictive impacts on inward FDI in big emerging countries, most pronounced in the BRICS countries, and those in the mining, quarrying, and oil extraction sector are barriers to inward FDI in African countries. Reforms to liberalize sectoral restrictions by country have positive effects on FDI, but deregulation of the services sector has beneficial effects on inward FDI in all countries.

The remainder of this paper is structured as follows. The next section documents recent literature on the effects of FDI regulation on investment. In the second part, we describe our econometric model with data, sources, and the type of regression used. The third section presents and discusses the results. The last section uses the results of this study to perform policy simulation.

## II. LITERATURE REVIEW

Empirical studies that examine the impact of restrictive measures on FDI use two main indices. Some authors study the effects of restrictions on FDI using the FDI Regulatory Restrictiveness Index of OECD and others !the indexes of capital account restrictions based on IMF's AREAER database.<fnref n="3" />

Authors such as Nicoletti et al (2003), based on the original version of the index created by Golub (2003)<fnref n="4" /> and the OECD's PMR<fnref n="5" />, explore the effects of FDI restrictions and other policies on foreign direct investment in a panel of 28 OECD countries between 1980 and 2000. The paper uses a gravity model to control bilateral outward FDI flows and a dynamic panel model to explain total multilateral inward FDI stocks. Their results suggest that FDI restrictions could reduce bilateral outward FDI stocks by between 10% and 80% on average, depending on the type of restriction. Inward FDI stocks are also impacted by FDI restrictions, but the results should be treated carefully due to the lack of variability of restrictions across OECD member countries. The analysis of Ghosh et al (2012) similar to the previous one shows the impact of restrictions on inward FDI stocks using panel data (1981-2004) for 23 OECD countries. Based on the updated of Koyama and Golub (2006) index and a gravity model, they find significant negative effects of restrictions on inward FDI stocks. To determine the short- and long-run effects of the restrictions, they use an autoregressive distributed lag model. Their results show that the short-run elasticity estimated was between 0.06 and -0.14, and the long-run elasticity between -0.64 and -1.49.

The analysis of Ahrend and Goujard (2012) indicates that FDI restrictions may contribute to greater risks of financial crisis. Indeed, higher restrictions in OECD countries, measured by OECD indexes, and anti-competitive product market regulation have contributed to reduced financial stability. That is due to a rise of countries' debt over FDI or capital investment. By contrast, more stringent capital regulations for banks and more openness to foreign bank entry have reduced the vulnerability to financial contagion. Fournier (2015) examines the determinants of foreign direct investment (FDI) from 1998 to 2013, including FDI restrictions. Using gravity models and the recent version of the OECD FDI restrictiveness index, he finds a

<footnote n="3">³Database on the exchange rates and trade regimes of all members of the International Monetary Fund (currently 189 countries) and three territories (Aruba, Hong Kong SAR, and Curaçao and Sint Maarten - formerly the Netherlands Antilles).</footnote>

<footnote n="4">⁴The first to construct the aggregate index of FDI restrictions.</footnote>

<footnote n="5">⁵Product Market Regulation index.</footnote>
significant negative impact of restrictions on FDI stocks after controlling for various political and structural determinants of bilateral FDI.

Recent studies examining the impacts of restrictive measures on FDI through the OECD FDI Regulatory Restrictiveness Index are those by Mistura and Roulet (2019) and Gregori and Nardo (2021). They differ from those mentioned above because they examine the effects of restrictions on aggregate FDI, sectoral FDI, and M&A. They also examine the impact of different types of restrictions such as foreign equity limitations, screening or approval mechanisms, restrictions on the employment of foreigners as key personnel and operational restrictions. Mistura and Roulet (2019) find that reforms liberalising FDI restrictions by about 10 percent could increase bilateral FDI in stocks by 2.1 percent on average. The effects are greater for FDI in the services sector, but also in manufacturing sectors which are typically open to FDI. The effect of reducing foreign equity limitations is the strongest, and foreign investment screening policies significantly curb FDI, but to a much lower extent. Gregori and Nardo (2021) show that the presence of formal screening procedures does not negatively affect cross-border investment on average. Other restrictive policies, such as licensing requirements, quantitative limitations, restrictions to the market access and activity of foreign companies limit M&A flows. This is particularly relevant in the manufacturing and non-financial services industries, where M&A flows are negatively affected by restrictions on foreign personnel being employed in key positions, and restrictions on the establishment of branch offices, land acquisition, or profit and capital repatriations. Their results are also in line to the literature about the effects of regulation on trade in services. Indeed Van der Marel and Shepherd's (2013) examine the relationship between trade in services and regulation. They find a negative relationship between regulatory restrictiveness and trade flows, with the effects varying across sectors. Nordås and Rouzet (2017) confirm this result. In their gravity model relating trade in services with regulatory restrictions, tighter restrictions decrease both trade and investment, with the exports of services more impacted than imports.

Contrary to the above studies, Binici, Hutchison and Schindler (2009) apply an index of capital restrictions based on IMF's AREAER information, by asset class and covering 74 countries over the period 1995-2005. They study the effects of FDI and equity portfolio investment restrictions on total inward and outward FDI and equity portfolio investment. The results suggest that restrictions control capital outflows, not inflows. The study of Arbatli (2011) similar to the previous one, uses capital account restriction indices based on IMF's AREAER database. Through a binary index of FDI restrictions, he investigates the determinants of FDI flows into emerging economies. The author creates two binary indicators of FDI restrictions: one that assesses the existence of any restrictions on FDI inflows; and one that captures restrictions on the liquidation of direct investment. He uses a dynamic panel model approach to model FDI flows and data for 46 countries over 20 years. The results suggest that FDI capital restrictions have a significant negative effect on inward FDI, but no significant effect was found for restrictions on the liquidation of investment.

### III. THEORETICAL GRAVITY MODEL FOR FDI

Gravity model, is increasingly used when investigating determinants of FDI flows.<fnref n="6" /> Head and Ries (2008) provide theoretical micro-foundations for a gravitational model of FDI and

<footnote n="6">⁶Wei (2000) or Bénassy-Quéré et al. (2007).</footnote>
motivate its application for modelling bilateral FDI as well as trade flows.

The framework used in this paper is based on recent advances in the literature on gravitational models (see Yotov et al., 2016). In particular, we apply the gravity modeling approach for FDI developed by Anderson et al (2016, 2017). Indeed, their model shows how trade and FDI are linked and how they respond to natural or man-made barriers to trade and investment.

In particular, Anderson et al (2016, 2017) model focuses on the interpretation of FDI based on technological capital or knowledge capital. A given stock of technological capital (patents, plans, management skills, etc.) can be used simultaneously in more than one country. The value of knowledge capital increases when it can be "leased" to other countries as FDI. Since knowledge capital flows are largely intangible and therefore difficult to measure, bilateral FDI stock will be used as a proxy indicator of knowledge capital flows between two countries.

FDI from country i to country j is as follows: $FDI_{ij}^{stock}$. It is positively influenced by the size of source country ($E_i$), as large economies tend to invest more in technological capital. The stock of bilateral FDI is also positively influenced by the size of destination country ($Y_j$), as large economies can in principle absorb more foreign technology. If the size of the aggregate stock of technological capital in country i is denoted by $M_i$, the ratio $Y_i/M_i$ can be considered as a gross measure of the potential absorptive capacity of country j for FDI-related technological capital from country i. FDI flows are impeded by obstacles or frictions. For FDI, the relative openness of country j to foreign technologies can be represented by $ij$, which has values from 0 to 1. If $w_{ij} = 1$, country j is fully open to the entry of technological capital from country i, while in the case of $w_{ij} = 0$, no technological capital from country i is allowed. All these factors are the main determinants of the bilateral stock of FDI.<fnref n="7" /> The general formulation is as follows:

$$FDI_{ij}^{stock} = w_{ij}^{\eta} \frac{\alpha E_i Y_i}{P_i M_j} \quad (1)$$

With $E_i$ measures the size of country i as a total expenditure, including expenditures for the development of technological capital; $Y_j$ is a measure of the size of host country j. The parameter $\eta$ is the elasticity of FDI revenue flows with respect to the measure of openness. More openness in country j will lead to more frequent use of the technology stock, which will lead to an increase of FDI revenues. The other elements of equation (1) come from the structural gravity system for trade, in which the FDI determinants are integrated. $\alpha$ groups a set of fixed parameters from the theoretical model.<fnref n="8" /> Finally, $P_i$ is the inward multilateral resistance term of the gravity trade model. They aggregate the bilateral trade costs of country i with all other countries:

$$P_i = \left[ \sum_{j=1}^{N} \left( \frac{t_{ji}}{\Pi_j} \right)^{1-\sigma} \frac{Y_j}{Y} \right]^{\frac{1}{1-\sigma}} \quad (2)$$

With $t_{ji}$ represents the bilateral trade-cost frictions (bilateral distance, having different languages, common border..) that increase bilateral trade cost. $Y = \sum Y_j$ is world production or world GDP, used to normalize the size of destination country ($Y_j$), and $\sigma$ is the elasticity of substitution from CES functions used to aggregate multilateral resistance (MR) terms.<fnref n="9" />

<footnote n="7">⁷Time indices are omitted in this representation.</footnote>

<footnote n="8">⁸These include parameters such as the depreciation rate, the utility function discount factor and other parameters that are used in the underlying theoretical model (see Anderson et al., 2016, 2017).</footnote>

<footnote n="9">⁹With $\sigma > 1$, the elasticity of substitution shows that all countries have a preference for a variety of products and technological capital by origin country.</footnote>
World trade is a fully integrated system, equation (2) also contains the term $\Pi_j$, which represents the outward multilateral trade resistances of country j. It aggregates the bilateral trade costs of country j with respect to all other countries. The gravity system of the FDI becomes:

$$ \Pi_j = \left[ \sum_{j=1}^{N} \left( \frac{t_{ij}}{\bar{q}_i} \right)^{1-\sigma} \frac{E_i}{Y} \right]^{\frac{1}{1-\sigma}} \quad (3) $$

Equation (3) shows that if trade costs increase in host country j, domestic prices rise and thus reduce the country's real potential to absorb foreign technological capital.

The author has highlighted the gravity estimation of bilateral FDI remains Bénassy-Quéré et al. (2005). The latter study the impacts of FDI determinants on horizontal FDI. In the model, bilateral FDI stocks depend on both economies' GDP, the determinants of supply and demand, and the distance between capital. However, recent theoretical developments have provided other foundations for the application of a gravity model to other FDI models (Kleinert and Toubal, 2010; Bergstrand and Egger, 2007; Head and Ries, 2008; De Sousa et al., 2012; Heid and Larch, 2016 and Nordås and Rouzet, 2017).<fnref n="10" /> Bergstrand and Egger (2007) implement a gravity model of FDI by including several aspects of FDI (foreign direct investment (FDI), foreign affiliate sales (FAS) and multinational companies (MNEs). However, Head and Ries (2008) develop a gravity model of FDI by considering the M&A process, in which the holding company tries to control the assets abroad.

## IV. MODEL AND ESTIMATION ISSUES

In our empirical analysis, we examine the impacts of restrictions on FDI stocks between OECD and emerging countries. Using the model of Anderson and Van Wincoop (2003); Anderson et al (2016, 2017), our baseline regression equation is the following:

$$ FDI_{ij,t} = \exp[\beta_0 + \beta_1 Ln(FDI_{ij,t-1}) + \beta_2 FDI RI_{j,t-1}^s + \beta_3 t_{ij,t-1} + \beta_4 Ln(GDP_{j,t-1}) + \beta_5 Ln(GDP_{j,t-1}) + \beta_6 X_{j,t-1} + \alpha_i + \phi_j + \gamma_t + \epsilon_{ij,t}] \quad (4) $$

With $FDI_{ij,t}$ represents FDI stocks from country i (the reporting or source country) to country j (the partner or host country) in period t (2010-2019) = $\frac{FDI_{ij,t}}{GDP_{deflator}(ij,t)}$. FDI are calculated by dividing FDI stocks (in U.S. dollars) by the average of the source and host country GDP deflators to remove inflation. $FDI_{ij,t-1}$ is one-year lagged dependent variable (Egger and Merlo, 2007).<fnref n="11" /> Following Mistura and Roulet (2019), all explanatory variables are lagged by one year to reduce potential endogeneity issues. $FDI RI_{j,t-1}^s$ is our interest variable (FDI Regulatory Index), i.e. the restrictive measures on FDI implemented in the destination country j at the time t-1 in the sector s (s= primary, secondary and tertiary sectors). It is measured by the OECD FDI restrictiveness index. $t_{ij,t-1}$ includes time-invariant bilateral control variables, i.e. bilateral distance, common language, common border, colonial links

<footnote n="10">¹⁰The studies combine both horizontal and vertical FDI.</footnote>

<footnote n="11">¹¹They argue that ignoring the dynamic nature of FDI could lead to an overestimation of the effect of bilateral factors.</footnote>
(Blonigen and Piger, 2014)<fnref n="12" /> and time varying variables such as regional trade agreements (RTA), bilateral investment treaties (BIT) and human capital dissimilarity ($HCD_{ij,t}$). According to Ethier and Markusen (1996), the difference in factor endowments can affect inward FDI.<fnref n="13" /> We include standard gravity variables, specifically the GDP of both the origin country and the destination country. $X_{jt}$ covers destination country specific characteristics such as regulatory quality (Bénassy-Quéré et al., 2007) and FDI determinants in destination country such as trade openness <fnref n="14" />, productivity, labour freedom index<fnref n="15" />, tax burden (Djankov, Ganser, McLiesh, Ramalho, and Shleifer, 2010).<fnref n="16" /> $\alpha_i$ and $\phi_j$ represent source-host country fixed effect (dummy variables that control the inward and outward multilateral resistance terms). $\gamma_t$ is a time fixed effect (capturing the global macroeconomic cycle) and $\epsilon_{ijt}$ is an error term. Standard errors are clustered by country pairs to control for potential heteroskedasticity and to limit the potential effect of persistence over time of FDI stock levels in each pair of countries, see Fournier (2015). $\beta_2$ is the coefficient of interest; according to the literature it is negative (Ghosh et al., 2012; Fournier, 2015; Mistura and Roulet, 2019).

Our dependent variable takes a value of zero and an estimation using OLS leads to a bias (zero FDI is associated with high bilateral fixed costs). To avoid biased estimation results, we use the Pseudo-Maximum Likelihood estimator (PPML) suggested by Santos Silva and Tenreyro (2006). The PPML is used in our case in order to deal with the constraints of zero trade between States, and also estimates the non-linear shape of the gravity model in the presence of heteroskedasticity. However, an important assumption of the PPML estimator is equidispersion, which means that the conditional variance of the dependent variable and its conditional mean are equal. PPML estimation can be assessed by solving the following condition:

$$ \sum_{p} [X^p - \exp(Z^p \beta)] = 0 \qquad (5) $$

Where $p$ is the country pair, $X^p$ is unilateral trade (i.e. exports or imports) between country pairs in non-logarithmic levels and $Z^p$ is the complete vector of the gravity equation as defined above.

We include in the estimation fixed effects by origin country to control for unobservable multilateral resistance terms (Olivero and Yotov, 2012).<fnref n="17" />

## V. DATA DESCRIPTION

To analyse the effects of restrictive measures on FDI stocks between OECD and emerging countries, we use panel data across 49 countries from 2010 to 2019. Indeed, we consider OECD

<footnote n="12">¹²They identify as main enabling factors for inward FDI the traditional gravity variables such as cultural distance, difference in labor endowment, and the presence of trade agreements.</footnote>

<footnote n="13">¹³Golub et al., 2003 define human capital dissimilarity as the difference in absolute value between the human capital index in the destination country and that in the source country $HCD_{ij,t} = |(\ln(education_{jt} - education_{it}))|$.</footnote>

<footnote n="14">¹⁴Chakrabarti (2001) finds that a country's degree of openness to international trade is a relevant determinant of the FDI decision, because most investment projects concern the tradable sector.</footnote>

<footnote n="15">¹⁵Nordin et al. (2019).</footnote>

<footnote n="16">¹⁶They estimate, using cross-sectional survey data for 85 developed and developing countries, that corporate taxes always have a negative and significant effect on FDI inflows.</footnote>

<footnote n="17">¹⁷We also estimated the model using destination country's dummies, but the model presents convergence issues (Santos Silva and Tenreyro, 2011).</footnote>
countries because inward and outward FDI account for a large share of GDP and we include emerging countries due to the high level of restrictions in FDI (see figure 4). Annual data from 2010-2019 to explain the decline in inward FDI since 2016, and to consider the new FDI statistics introduced in 2014. Our dependent variable is aggregate bilateral FDI stock. The data are collected on OECD Foreign Direct Investment Statistics.<fnref n="18" /> The data cover a range of advanced and emerging countries in terms of origin and destination. However, we use the latest version set up by the OECD.<fnref n="19" /> This database highlights bilateral FDI between OECD member and non-member countries and runs from 2005 to 2019. It also highlights sectoral FDI (primary, manufacturing and service sectors).<fnref n="20" /> Missing data (or non-reported, suppressed) and negative FDI are replaced by 0 in our case, because negative values are interpreted as disinvestment and to have a balanced panel (Kox and Rojas, 2019).

<figure><img src="image_7.png" /><figcaption>Figure 4: Correlation between FDI and restrictive measures, 2019</figcaption></figure>

Source: OECD database

Our interest variable captures the level of restrictiveness in FDI. We use FDI Regulatory Restrictiveness Index of OECD. Indeed, this variable measures the restrictiveness of the policies implemented in the FDI sector in 70 countries (36 OECD countries and 34 non-OECD countries). It gauges the restrictiveness of a country's FDI rules by looking at the four main types of restrictions on FDI:

* Foreign equity limitations.

* Screening or approval mechanisms.

* Restrictions on the employment of foreigners as key personnel.

* Operational restrictions, e.g. restrictions on branching and on capital repatriation or on land ownership.

<footnote n="18">¹⁸https://stats.oecd.org/Index.aspx?QueryId=64194.</footnote>

<footnote n="19">¹⁹Benchmark Definition 4th Edition (BMD4).</footnote>

<footnote n="20">²⁰Sector-specific FDI data are not bilateral so the sectoral analysis will be conducted with the sectoral FDI restriction index.</footnote>
The restrictions are also quantified in three sectors of activity: primary, secondary and tertiary. Restrictions are evaluated on a 0 (open) to 1 (closed) scale. Data are available for 1997, 2003 and 2006 and uninterrupted annual data for the period 2010-2019. Data collected from OECD FDI Regulatory Restrictiveness Index database.

In addition, bilateral resistance variables such as the bilateral distance between the two capitals and binary variables (common border, language and colonial links) come from CEPII (Centre d' Etudes Prospectives et d' Informations Internationales) database. Binary variables such as regional trade agreements are obtained from the WTO (Regional Trade Agreements Information System, RTA-IS) and information on the signing and ratification of bilateral investment treaties is taken from on UNCTAD's International Investment Agreements database.

We consider the specific characteristics of the destination country that affect inward FDI such as regulatory quality (data available on Worldwide Governance Indicators). It refers to perceptions of the ability of the government to formulate and implement sound policies and regulations that permit and promote private sector development. The indicator is estimated yearly at the country level, in units of a standard normal distribution, ranging from approximately -2.5 to 2.5.

FDI determinants in destination countries such as tax burden and labour freedom index are collected on The Heritage Foundation database.<fnref n="21" /> Tax burden is a composite measure that reflects marginal tax rates on both personal and corporate income and the overall level of taxation (including direct and indirect taxes) imposed by all levels of government as a percentage of gross domestic product (GDP). The labor freedom component is a quantitative measure that considers various aspects of the legal and regulatory framework of a country's labor market, including regulations concerning minimum wages, laws inhibiting layoffs, severance requirements, and measurable regulatory restraints on hiring and hours worked, plus the labor force participation rate as an indicative measure of employment opportunities in the labor market. These two indices are graded on a scale of 0 (less flexible) to 100 (more open or flexible). Productivity are collected on OECD database.<fnref n="22" /> Human capital index in Penn World Table database of Groningen Growth and Development Centre.<fnref n="23" /> Trade openness, GDP of exporting and importing countries are extracted from the World Bank database (World Development Indicators)

## VI. FDI GRAVITY RESULTS AND DISCUSSION

This section presents and analyzes the empirical results. We estimate the effects of restrictive measures on FDI stocks between OECD and emerging countries from 2010 to 2019. Tables 2, 3 and 4 present the baseline gravity model results for cross-border FDI using the OECD FDI restrictiveness index. Table 2 presents the results of restrictions on bilateral FDI among advanced countries (intra-OECD) and tables 3 and 4 respectively the results on cross-border FDI among advanced and big emerging countries and between OECD and middle-income

<footnote n="21">²¹https://www.heritage.org/index.</footnote>

<footnote n="22">²²It measured by GDP per hour worked (U.S dollars).</footnote>

<footnote n="23">²³This index refers to the number of years of schooling and return on education.</footnote>
emerging countries (African).<fnref n="24" /> In order to determine whether the effects of FDI restrictions can be expected to differ for developed and developing economies, we include a dummy variable equals 1 if the destination country is an OECD member in year t and an interaction term with the variable of interest capturing their level of FDI restrictiveness (results presented in Tables 3 and 4). We confirmed the validity of our results using a series of robustness tests presented in Tables 5 to 11. We apply the PPML estimator to control for the zero FDI and heteroskedasticity issues, we also include country fixed effects to control for structural multilateral resistance. Therefore, in order to better capture multilateral resistance and produce unbiased estimates, we include country and time fixed effects separately.

i. Baseline results

In terms of variables of main interest - the FDI restrictiveness indices - we find that global FDI restrictions have a negative and non-significant effect on intra-OECD FDI because the sectoral FDI regulation index is larger than the global index (see Figure 5). Moreover, these restrictions represent a barrier to cross-border FDI among OECD countries and the big emerging countries. The introduction of reforms leading to a 0.05 point reduction in level of FDI restrictiveness could increase bilateral FDI inward stocks by around 17.17% on average (column 4 of Table 3).<fnref n="25" /> The interaction between our dummy variable and the restrictive measures does not have a significant effect on FDI. The combined negative and significant effect of global restrictive measures and non-significant effect of our interaction term suggests that the negative effects of restrictions on FDI tend to be more accentuated for emerging economies.<fnref n="26" /> This result confirms the findings of Mistura and Roulet (2019). Further, global restrictive measures do not affect cross-border FDI between OECD and African countries (Table 4).<fnref n="27" />

The sectoral analysis of FDI restrictive measures shows significant negative effects of restric-
tions in the services sector on intra-OECD FDI. The effect of a 0.05 point reduction in FDI
restrictions in services is associated with a 17.36 % increase in global FDI (column 4 of table
2). The reason is that services are the largest sector for inward investment in the OECD and
also the most restrictive compared to other sectors, which explains the non-significant results
(see Table 1 and figure 5). Indeed, the manufacturing sector, excluding defense and military
goods, is the most open sector where countries generally allow foreign investment. In the
primary sector, the location-specific and licensing-heavy nature of some of such investments
(e.g., extractive industries) may offer relatively few alternatives for foreign investors. The
existence of numerous taxes and royalties where economic rents are potentially high, as in the
extractive industries, to capture a part of such rents for their nationals limits investment in this
sector (Mistura and Roulet, 2019). The analysis on FDI across advanced and large emerging
countries suggests significant negative effects of restrictive measures in the services sector. A
reduction in service sector restrictions by 0.05 points leads to an increase in global inward FDI
by 31.31% on average, and these effects are greater for emerging countries.

[Insert Table 1 here.]

<footnote n="24">²⁴The estimated coefficients from regressions pooling wealthy and poor economies may fail to capture the true relationship between FDI and the explanatory variable of interest (Blonigen and Wang's, 2004).</footnote>

<footnote n="25">²⁵The percentage change in inward FDI from a 0.05 point reduction in the FDI restrictiveness index is calculated as follows: [exp(-0.05*coefficient)-1]*100.</footnote>

<footnote n="26">²⁶The reason is that global and sectoral restrictions, especially in services, are very high in emerging countries.</footnote>

<footnote n="27">²⁷We have a limited sample of African countries, which could explain these results.</footnote>
<figure><img src="image_8.png" /><figcaption>Figure 5: OECD and Emerging countries FDI Regulatory Restrictiveness Index in 2019</figcaption></figure>

Source: OECD FDI Regulatory Restrictiveness Index database

Moreover, restrictions in the services sector hamper bilateral FDI between OECD and African countries, and as before the effects are more pronounced for African countries (column 8 of table 4). Interestingly, restrictive measures in the secondary sector boost FDI between OECD and African countries. Our interaction term shows significant negative effects of these measures for OECD countries and the combined effects show significant positive effects of restrictions in the manufacturing sector for African countries. The negative effects of restrictive measures in the secondary sector on FDI between OECD countries refers to the existing literature on the effects of restrictions in services on the performance of manufacturing firms (Ariu et al., 2019; Ariu et al., 2020; Amara, 2021). Indeed, restrictions on FDI in services impact the productivity of manufacturing firms (increased costs of sourcing services) as they increasingly use services as an important input of manufacturing value added. The positive effect of restrictions in the manufacturing sector for African countries can be explained by the fact that the index in this sector measures FDI restrictions in the food, chemical, metal, and electronics industries. Contrary to OECD countries where these sectors are developed with more competition, they are still nascent in North and South Africa with lower competition. An increase in restrictions in this sector leads to an increase in economic rents from FDI (Rouzet and Spinelli, 2016). One of our robustness tests incorporates restrictions in the mining and natural resources sector (a developed industry in Africa), and we find negative effects on FDI in Africa.

The negative impacts of restrictive measures in FDI are due to high entry costs in the different sectors. In addition to acting as a barrier to entry, this result may also underscore a potential signaling effect of restrictions about the difficulties in doing business as a foreign investor, including outside of the restricted sectors. Services are the sectors that receive the most FDI and thus are the most affected by these restrictions.

Insert Table 2 here.
Insert Table 3 here.

Insert Table 4 here.

In the different specifications, we also find the following effects: the standard gravity model variables such as distance, common language and colonial links have the expected signs and magnitudes and are statistically significant. Indeed, distance has negative and significant effects on cross-border FDI inflows among advanced and emerging countries as in the theory (Bénassy-Quéré et al., 2005; Basile et al., 2008). Binary variables such as common language and colonial links have positive and more significant effects on FDI between OECD and emerging countries. Moreover, the common border has negative and significant impacts on FDI inflows, which is contrary to the theory. This negative and significant sign is due to the substitutability between trade and FDI, especially between countries that share the same border (Gregori and Nardo, 2021). This can be explained by the European Monetary Union (Brouwer et al., 2008, Martínez-San Román et al., 2016) and the single currency (Camarero et al., 2018; Alfieri, 2020). Regional trade agreements (RTA) have significant negative effects on FDI in advanced countries, while there are significant positive impacts on cross-border FDI among advanced and emerging countries. The negative effect of trade agreements suggests that being a partner in a trade agreement tends to discourage FDI between origin and destination countries, because a trade agreement facilitates access to the destination country's market through other channels, such as exports or greenfield investments (Mistura and Roulet, 2019). Bilateral investment treaties (BIT) have negative and significant effects on cross-border FDI, more meaningful effects on FDI across OECD and emerging countries. The BIT has different characteristics than the RTA, it protects the investor against risks in the market receiving the FDI. It therefore establishes transparency on the host country (Bergstrand and Egger, 2013). These agreements among advanced countries and emerging or developing countries (North-South investment) have much greater effects than North-North agreements (Kox and Rojas, 2019). BITs affect negatively FDI inflows when the political risk in a country is high whereas the opposite occurs when the risk level is low (Tobin and Rose-Ackerman, 2005).<fnref n="28" />

If we consider the determinants and explanatory factors of FDI, the regulatory quality variable is positively related to cross-border FDI, highlighting the proactive role that public administration can exert to stimulate foreign investment (Gregori and Nardo, 2021). Trade openness attracts investment because of a complementarity between FDI and trade (Belke and Clemens, 2018). The dynamism of the destination economy has positive and significant impacts on FDI. These results confirm that the size of the destination country's market boosts cross-border investments by creating additional market shares, economies of scale, or reducing production costs for foreign investors (Eicher et al., 2012). Likewise, the dynamism of investing country is positively related to cross-border flows (Gregori and Nardo, 2021). The productivity measured by the GDP per hour employed is positively associated with FDI. Like the GDP of the destination country, productivity in the destination economy creates economies of scale and reduces production costs, which attracts cross-border FDI. The difference in relative human capital endowment is significant with a negative impact<fnref n="29" />, suggesting possibly the

<footnote n="28">²⁸This confirms the negative and more significant effects on cross-border FDI among advanced and emerging countries (where the political risk is higher).</footnote>

<footnote n="29">²⁹The effect is more significant on FDI among advanced and emerging countries.</footnote>
predominance of horizontal FDI and M&A investments (Mistura and Roulet, 2019). As Gregori and Nardo, 2021, the tax indicator does not have a significant effect on FDI flows, explained by the predominance of market factors over institutional aspects in driving cross-border investments (Gherghina, Simionescu and Hudea, 2019). Labour market flexibility attracts cross-border FDI. Indeed, labor market standards and regulations or any limitation placed on employment lead to labor market rigidity, which imposes costs on firms (Nordin et al., 2019).<fnref n="30" />

## ii. Robustness check

In this section, we performed several robustness tests to confirm our baseline results. First, we split our sample in two periods (2010-2014) and (2015-2019) and examine the different effects of restrictive measures on FDI between advanced and emerging countries. This test highlights two trends: the effects of the policy on international guidelines for the compilation of foreign direct investment (FDI) statistics implemented in many countries in 2014 and the impacts of the 2008-2009 financial crisis that led to a stagnation of FDI.<fnref n="31" /> We consider the different trends between 2010-2014 (effect of the crisis) and 2015-2019 (effect of the new policy for the compilation of FDI statistics). The results are presented in Table 5 and show more significant effects in the period 2015 to 2019 and confirm our results found above; however, during this period, global restrictions have negative and significant effects on intra-OECD FDI and on FDI between OECD countries and large emerging economies. Restrictive measures in the post-crisis period had a greater impact on FDI between OECD countries and emerging markets.

Insert Table 5 here.

The second test examines the effects of restrictive measures on FDI between advanced and BRICS countries<fnref n="32" /> considered as large emerging countries and between OECD and emerging countries excluding BRICS. This test shows whether the effects are different among emerging countries. The results reported in table 6 show that restrictions have negative and more significant impacts on BRICS than other emerging countries and confirm that restrictions in the service sector have a significantly negative impact on cross-border FDI.

Insert Table 6 here.

OECD inward and outward FDI in the services sector is the largest in comparison to the other two sectors (accounts for almost 60% of total FDI, see table 1) and considering table 7, FDI in the financial sector is the biggest of the cross-border FDI in services. The third test looks at the effects of restrictions in the disaggregated financial services sector on intra-OECD FDI. Table 8 presents the results and shows that restrictions in business and other financial services are negatively associated with cross-border FDI (negative and significant results). However, FDI restrictions in the insurance sector have no significant effect and those in the

<footnote n="30">³⁰Their study argues that the growth-effect of FDI is possibly influenced by the flexibility of the labor market in the host country.</footnote>

<footnote n="31">³¹Gregori and Nardo (2021) observed a stagnation of inward M&As in EU countries during 2011-14.</footnote>

<footnote n="32">³²Brazil, Russia, India, China and South Africa.</footnote>
banking sector have a positive and significant impact on intra-OECD FDI, explained by the profit margin of FDI in this sector as a result of restrictions (Rouzet and Spinelli, 2016).<sup>33</sup> A rise of 0.05 points in restrictions in the banking sector is associated with an increase in inward FDI by 28.30% on average.

Insert Table 8 here.

The two tests below estimate the effects of restrictive measures on FDI between OECD and emerging countries by type of economy. The big emerging countries have economies more oriented to the manufacturing and agricultural sectors than the North and South African countries where the main economic activity is agriculture and natural resources (table 9). In the first part, we study the effects of restrictions in the agricultural and manufacturing sectors on FDI between OECD countries and large emerging economies (results reported in table 10) and the second the effects of restrictions in the agricultural and natural resources sectors (mining, oil and gas, etc.) on FDI among OECD and African countries (table 11).

Insert Table 10 here.

Insert Table 11 here.

The results suggest that FDI restrictions in the manufacturing sector have significant negative effects on FDI between advanced and emerging countries, the effect being more pronounced if the destination country is an emerging country. In addition, restrictive measures in the mining, quarrying, and oil extraction sector have significant negative effects on FDI between advanced and African countries, with higher effects for African countries.

The last test examines the effects of restrictive measures on FDI across advanced and all emerging economies including Africa. North and South African countries are considered upper-middle-income countries according to the World Bank classification. The results presented in table 12 show significant negative impacts on FDI restrictions in the services sector. In addition, measures in the secondary sector are positively associated with inward FDI (significant but low magnitude). The positive impact is mainly due to restrictions in the secondary sector of African countries, as highlighted in our baseline results.

Insert Table 12 here.

These results underscore the implementation by the governments of attractive sectoral regulation of FDI. The effects of FDI vary according to the type of economy, but unanimously, liberalization of the services sector has more beneficial effects on inward FDI in all countries in order to boost the performance of manufacturing industries. The big emerging countries in addition to the services sector should deregulate the manufacturing sector which plays a vital role in economic activity, and for African countries, reforms to liberalize the natural resources sector would further boost inward investment. Governments also need to regulate FDI taking into account the restrictions of other countries, because regulations will affect FDI differently depending on the destination country.

<footnote n="33"><sup>33</sup>They showed that a high level of restrictiveness in the banking sector is associated with less competition in the market, so that incumbent financial institutions raise interest rates to increase their profit margins.</footnote>
VII. CONCLUSION

This paper, which investigates the effects of restrictive measures on FDI, contributes to the literature on the impact of restrictions on FDI, but differs from recent studies because it examines the sectoral effects of FDI restrictions on cross-border FDI between advanced and emerging countries.

Using a gravity model we examined the effects of global and sectoral restrictive measures on FDI among OECD countries, between advanced and large emerging countries and finally between advanced and African countries from 2010 to 2019. Our results suggested that global restrictive measures have non-significant negative effects on cross-border FDI between OECD countries, while restrictions on FDI in the services sector are negatively associated with inward FDI. In addition, both overall and service sector restrictions have negative and significant effects on inward FDI among OECD and emerging market countries. In addition, restrictions in the services sector hamper bilateral FDI between OECD and African countries, the effects being more pronounced for African countries. Interestingly, restrictive measures in the manufacturing sector stimulate FDI between advanced and African countries. The effects are significantly negative for OECD countries, so we can conclude that restrictions in this sector stimulate inward FDI in African countries.

The results are robust to the baseline results. Several tests are performed. First, we estimated the effects of global and sectoral restrictions between advanced and emerging countries in the period 2010 to 2014 and 2015 to 2019. The results confirmed our baseline results and showed more significant effects in the period 2015 to 2019. The second test examined the impacts of restrictive measures on the BRICS and on emerging countries excluding the BRICS, the results are more significant on the BRICS than on other emerging countries. The third test evaluated the effects of disaggregated restrictions on intra-OECD FDI, especially in financial services. The results suggested that restrictions in business and other financial services are negatively associated with cross-border FDI. However, restrictions on FDI in the insurance sector have no significant effect and those in the banking sector have a positive and significant impact on intra-OECD FDI. The last two tests showed that restrictive measures in the manufacturing sector have restrictive impacts on inward FDI in emerging economies, particularly in the BRICS, and that restrictions in the mining, quarrying, and oil extraction sector are an obstacle to inward FDI in African countries.

We could improve our study by considering financial FDI such as M&A. However, there are some important limitations, mainly related to the data. First, FDI restrictions have some limitations, notably that they are time-invariant for some sectors. Second, it would be really interesting to also examine the effects of these restrictive measures on domestic investment in future research.

This paper highlighted the detrimental impact of restrictive measures on cross-border FDI. It showed the negative impacts of sectoral restrictions depending on the type of economy receiving the FDI. From this study, we conclude that the drop of inward FDI in OECD countries since 2016 is due to a rise of restrictive and protectionist policies in order to protect local firms. It is also the result of Donald Trump's tax cuts since 2017. This measure led to repatriation of profits into United States. This decrease is probably due to the trade war between China and United States, which has a considerable effect on production and investment in global value chains.
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<caption>Table 1: OECD outward and inward FDI stocks by sector (% of total FDI)</caption>

34

<table><thead><tr><th rowspan="2">Years</th><th colspan="2">2016</th><th colspan="2">2017</th><th colspan="2">2018</th><th colspan="2">2019</th></tr><tr><th>Inward</th><th>Outward</th><th>Inward</th><th>Outward</th><th>Inward</th><th>Outward</th><th>Inward</th><th>Outward</th></tr></thead><tbody><tr><td>Agriculture, forestry, fishing and mining</td><td>0.73</td><td>0.29</td><td>0.82</td><td>0.3</td><td>0.79</td><td>1.1</td><td>1.08</td><td>2.14</td></tr><tr><td>Manufacturing sector</td><td>23.04</td><td>21.99</td><td>23.98</td><td>22.71</td><td>22.87</td><td>23.44</td><td>23.07</td><td>20.6</td></tr><tr><td>Service sector</td><td>63.48</td><td>60.46</td><td>62.44</td><td>61.75</td><td>64.22</td><td>61.23</td><td>62.47</td><td>62.38</td></tr></tbody></table>

Source: Author's calculation based on OECD FDI data

<footnote n="34">³⁴The partner country is the world.</footnote>
<table><caption>Table 2: Gravity Estimation Results of Impacts of Restrictive Measures on FDI Stocks: Intra-OECD countries</caption><thead><tr><th rowspan="3">Specification<br>Dependant variable<br>Years</th><th colspan="10">PPML Estimate</th></tr><tr><th colspan="4">FDI RI global</th><th colspan="4">Sectoral FDI RI</th></tr><tr><th>(1)</th><th>(2)</th><th>(3)</th><th>(4)</th><th>(5)</th><th>(6)</th><th>(7)</th><th>(8)</th></tr></thead><tbody><tr><td>FDI RI Global<sub>j,t-1</sub></td><td>-0.9684<br>(1.1535)</td><td>-0.7067<br>(1.1299)</td><td>-1.5775<br>(1.2897)</td><td>-1.4577<br>(1.2565)</td><td></td><td></td><td></td><td></td></tr><tr><td>FDI RI Primary<sub>j,t-1</sub></td><td></td><td></td><td></td><td></td><td>1.0655<br>(0.8421)</td><td>1.1570<br>(0.7943)</td><td>1.1757*<br>(0.6918)</td><td>1.0851<br>(0.6599)</td></tr><tr><td>FDI RI Secondary<sub>j,t-1</sub></td><td></td><td></td><td></td><td></td><td>0.9040<br>(1.2758)</td><td>1.1388<br>(1.2120)</td><td>0.4176<br>(1.6173)</td><td>0.5394<br>(1.5702)</td></tr><tr><td>FDI RI Tertiary<sub>j,t-1</sub></td><td></td><td></td><td></td><td></td><td>-2.6733*<br>(1.4024)</td><td>-2.6431*<br>(1.3860)</td><td>-3.3697**<br>(1.5783)</td><td>-3.2017**<br>(1.5114)</td></tr><tr><td>Ln FDI<sub>ij,t-1</sub></td><td>1.3921***<br>(0.0608)</td><td>1.4414***<br>(0.0634)</td><td>0.6660***<br>(0.0627)</td><td>0.7409***<br>(0.0642)</td><td>1.3806***<br>(0.0593)</td><td>1.4331***<br>(0.0604)</td><td>0.6574***<br>(0.0620)</td><td>0.7309***<br>(0.0641)</td></tr><tr><td>Ln distance<sub>ij,t-1</sub></td><td>-0.7392***<br>(0.1486)</td><td>-0.6847***<br>(0.1264)</td><td>-0.7486***<br>(0.1110)</td><td>-0.6828***<br>(0.1065)</td><td>-0.7635***<br>(0.1595)</td><td>-0.7065***<br>(0.1342)</td><td>-0.7681***<br>(0.1275)</td><td>-0.7002***<br>(0.1214)</td></tr><tr><td>Common border<sub>ij,t-1</sub></td><td>-0.2457**<br>(0.1183)</td><td>-0.2539**<br>(0.1046)</td><td>-0.2492**<br>(0.1138)</td><td>-0.2408**<br>(0.1096)</td><td>-0.2294*<br>(0.1253)</td><td>-0.2344**<br>(0.1103)</td><td>-0.2210**<br>(0.1093)</td><td>-0.2150**<br>(0.1056)</td></tr><tr><td>Common lang<sub>ij,t-1</sub></td><td>0.1162<br>(0.1175)</td><td>0.0851<br>(0.1110)</td><td>0.1324<br>(0.1060)</td><td>0.1198<br>(0.1004)</td><td>0.1096<br>(0.1208)</td><td>0.0790<br>(0.1119)</td><td>0.1419<br>(0.1059)</td><td>0.1291<br>(0.1005)</td></tr><tr><td>Colonial links<sub>ij,t-1</sub></td><td>0.0798<br>(0.1753)</td><td>0.0705<br>(0.1621)</td><td>0.2398**<br>(0.1181)</td><td>0.2322**<br>(0.1159)</td><td>0.0469<br>(0.1795)</td><td>0.0365<br>(0.1641)</td><td>0.1867<br>(0.1158)</td><td>0.1835<br>(0.1137)</td></tr><tr><td>RTA<sub>ij,t-1</sub></td><td>-0.4967***<br>(0.1446)</td><td>-0.4430***<br>(0.1438)</td><td>0.1999<br>(0.1238)</td><td>0.2427**<br>(0.1136)</td><td>-0.5057***<br>(0.1519)</td><td>-0.4543***<br>(0.1526)</td><td>0.2070<br>(0.1401)</td><td>0.2499*<br>(0.1286)</td></tr><tr><td>BIT<sub>ij,t-1</sub></td><td>-0.2125*<br>(0.1151)</td><td>-0.1991*<br>(0.1092)</td><td>-0.2181<br>(0.1500)</td><td>-0.1987<br>(0.1425)</td><td>-0.2631**<br>(0.1091)</td><td>-0.2516**<br>(0.1039)</td><td>-0.3515**<br>(0.1704)</td><td>-0.3218**<br>(0.1620)</td></tr><tr><td>Ln GDP<sub>i,t-1</sub></td><td>0.2056***<br>(0.0267)</td><td>0.1414<br>(0.1014)</td><td>0.2175***<br>(0.0255)</td><td>-0.2783<br>(0.1864)</td><td>0.2044***<br>(0.0265)</td><td>0.1346<br>(0.1007)</td><td>0.2164***<br>(0.0254)</td><td>-0.2785<br>(0.1871)</td></tr><tr><td>Ln GDP<sub>j,t-1</sub></td><td>0.6167***<br>(0.1129)</td><td>0.6371***<br>(0.1073)</td><td>1.6049***<br>(0.1455)</td><td>1.5614***<br>(0.1427)</td><td>0.5655***<br>(0.1183)</td><td>0.5830***<br>(0.1129)</td><td>1.5211***<br>(0.1428)</td><td>1.4865***<br>(0.1407)</td></tr><tr><td>Trade openness<sub>j,t-1</sub></td><td>0.3600***<br>(0.0912)</td><td>0.3741***<br>(0.0925)</td><td>0.9315***<br>(0.1011)</td><td>0.9049***<br>(0.1001)</td><td>0.3490***<br>(0.0882)</td><td>0.3634***<br>(0.0879)</td><td>0.9139***<br>(0.0974)</td><td>0.8896***<br>(0.0967)</td></tr><tr><td>Regulatory quality<sub>j,t-1</sub></td><td>0.1178***<br>(0.0367)</td><td>0.0555<br>(0.0408)</td><td>0.1755***<br>(0.0425)</td><td>0.1206***<br>(0.0442)</td><td>0.1173***<br>(0.0356)</td><td>0.0524<br>(0.0392)</td><td>0.1763***<br>(0.0412)</td><td>0.1209***<br>(0.0430)</td></tr><tr><td>Ln productivity<sub>j,t-1</sub></td><td>0.0196<br>(0.5484)</td><td>0.2710<br>(0.5456)</td><td>0.6613<br>(0.4474)</td><td>0.8190*<br>(0.4410)</td><td>-0.0842<br>(0.5182)</td><td>0.1468<br>(0.5127)</td><td>0.4299<br>(0.4412)</td><td>0.5964<br>(0.4350)</td></tr><tr><td>Ln tax burden<sub>j,t-1</sub></td><td>0.0129<br>(0.6223)</td><td>0.1087<br>(0.5920)</td><td>0.0588<br>(0.6089)</td><td>0.1611<br>(0.6004)</td><td>0.2634<br>(0.5915)</td><td>0.3527<br>(0.5499)</td><td>0.2314<br>(0.5867)</td><td>0.3245<br>(0.5758)</td></tr><tr><td>HCD<sub>ij,t-1</sub></td><td>-0.9895<br>(0.9527)</td><td>-1.7054*<br>(0.9159)</td><td>0.2990<br>(1.2344)</td><td>-0.0398<br>(1.1792)</td><td>-1.1331<br>(0.9418)</td><td>-1.8124**<br>(0.9034)</td><td>-0.0916<br>(1.2924)</td><td>-0.3689<br>(1.2312)</td></tr><tr><td>Ln Labor freedom<sub>j,t-1</sub></td><td>0.7091*<br>(0.3874)</td><td>0.5527*<br>(0.3199)</td><td>1.9088***<br>(0.4627)</td><td>1.7763***<br>(0.4482)</td><td>0.7295*<br>(0.3991)</td><td>0.5615*<br>(0.3293)</td><td>1.9387***<br>(0.4669)</td><td>1.8071***<br>(0.4547)</td></tr><tr><td>Time - FE</td><td>No</td><td>Yes</td><td>No</td><td>Yes</td><td>No</td><td>Yes</td><td>No</td><td>Yes</td></tr><tr><td>Country - FE</td><td>No</td><td>No</td><td>Yes</td><td>Yes</td><td>No</td><td>No</td><td>Yes</td><td>Yes</td></tr><tr><td>R<sup>2</sup></td><td>0.7644</td><td>0.7742</td><td>0.8330</td><td>0.8371</td><td>0.7656</td><td>0.7754</td><td>0.8345</td><td>0.8384</td></tr><tr><td>Observations</td><td>12391</td><td>12391</td><td>12391</td><td>12391</td><td>12391</td><td>12391</td><td>12391</td><td>12391</td></tr></tbody></table>

Notes: The dependent variable is bilateral FDI stocks. Columns (1), (2), (3), (4) represent the results of the impact of global FDI regulatory restrictiveness index on cross-border investment and (5), (6), (7), (8) the results of sector-specific regulatory restrictiveness of FDI. Standard errors are reported in parentheses and clustered by country-pair level. *, **, *** denote significance respectively at the 10%, 5% and 1% levels.
<table><caption>Table 3: Gravity Estimation Results of Impacts of Restrictive Measures on FDI Stocks: OECD vs. Emerging countries</caption><thead><tr><th rowspan="2">Model</th><th colspan="4">FDI RI global</th><th colspan="4">Sectoral FDI RI</th></tr><tr><th>(1)</th><th>(2)</th><th>(3)</th><th>(4)</th><th>(5)</th><th>(6)</th><th>(7)</th><th>(8)</th></tr></thead><tbody><tr><td>FDI RI Global<sub>j,t-1</sub></td><td>-0.8966<br>(1.2328)</td><td>-0.6555<br>(1.3337)</td><td>-2.7090***<br>(0.8676)</td><td>-2.8372***<br>(0.8605)</td><td></td><td></td><td></td><td></td></tr><tr><td>FDI RI Primary<sub>j,t-1</sub></td><td></td><td></td><td></td><td></td><td>3.6750**<br>(1.8083)</td><td>2.4437<br>(2.1133)</td><td>0.7382<br>(1.6106)</td><td>1.9517<br>(1.6061)</td></tr><tr><td>FDI RI Secondary<sub>j,t-1</sub></td><td></td><td></td><td></td><td></td><td>3.1933<br>(2.6091)</td><td>3.9684<br>(2.7213)</td><td>2.4651<br>(1.5354)</td><td>2.2995<br>(1.6283)</td></tr><tr><td>FDI RI Tertiary<sub>j,t-1</sub></td><td></td><td></td><td></td><td></td><td>-6.1587**<br>(2.7217)</td><td>-5.0693*<br>(2.9055)</td><td>-4.1793**<br>(1.7590)</td><td>-5.4537***<br>(1.9009)</td></tr><tr><td>OECD dum<sub>j</sub> * FDI RI Global</td><td>-0.4176<br>(2.6573)</td><td>-0.9677<br>(2.6496)</td><td>1.0522<br>(1.6975)</td><td>1.8073<br>(1.9091)</td><td></td><td></td><td></td><td></td></tr><tr><td>OECD dum<sub>j</sub> * FDI RI Primary</td><td></td><td></td><td></td><td></td><td>-1.5790<br>(2.5561)</td><td>-0.1979<br>(2.8042)</td><td>0.8708<br>(1.7777)</td><td>-0.3874<br>(1.8106)</td></tr><tr><td>OECD dum<sub>j</sub> * FDI RI Secondary</td><td></td><td></td><td></td><td></td><td>-2.9205<br>(3.3093)</td><td>-3.3730<br>(3.2836)</td><td>-2.3615<br>(2.5308)</td><td>-1.9885<br>(2.6015)</td></tr><tr><td>OECD dum<sub>j</sub> * FDI RI Tertiary</td><td></td><td></td><td></td><td></td><td>2.5216<br>(3.6011)</td><td>0.7075<br>(3.7849)</td><td>0.5918<br>(2.4709)</td><td>2.2627<br>(2.8830)</td></tr><tr><td>OECD dum<sub>j</sub></td><td>-0.3455<br>(0.4544)</td><td>-0.5656<br>(0.4343)</td><td>0.2383<br>(0.2899)</td><td>1.6942***<br>(0.5514)</td><td>-0.3795<br>(0.4242)</td><td>-0.6101<br>(0.4061)</td><td>0.1558<br>(0.3015)</td><td>1.4498***<br>(0.5021)</td></tr><tr><td>Ln FDI<sub>ij,t-1</sub></td><td>0.1768***<br>(0.0634)</td><td>0.1169<br>(0.0731)</td><td>0.2169***<br>(0.0449)</td><td>0.1037**<br>(0.0482)</td><td>0.1697***<br>(0.0645)</td><td>0.1053<br>(0.0747)</td><td>0.2132***<br>(0.0430)</td><td>0.1031**<br>(0.0457)</td></tr><tr><td>Ln distance<sub>ij,t-1</sub></td><td>-1.9369***<br>(0.2594)</td><td>-1.9332***<br>(0.2639)</td><td>-1.0958***<br>(0.1336)</td><td>-1.1267***<br>(0.1373)</td><td>-1.9735***<br>(0.2662)</td><td>-1.9679***<br>(0.2711)</td><td>-1.1196***<br>(0.1449)</td><td>-1.1546***<br>(0.1504)</td></tr><tr><td>Common border<sub>ij,t-1</sub></td><td>-0.5249*<br>(0.2757)</td><td>-0.4980*<br>(0.2754)</td><td>-0.4240***<br>(0.1497)</td><td>-0.4442***<br>(0.1512)</td><td>-0.4977*<br>(0.2833)</td><td>-0.4692*<br>(0.2834)</td><td>-0.3903***<br>(0.1444)</td><td>-0.4130***<br>(0.1456)</td></tr><tr><td>Common lang<sub>ij,t-1</sub></td><td>0.5088*<br>(0.2708)</td><td>0.5194*<br>(0.2709)</td><td>0.3148**<br>(0.1485)</td><td>0.2863*<br>(0.1499)</td><td>0.5073*<br>(0.2722)</td><td>0.5180*<br>(0.2717)</td><td>0.3263**<br>(0.1469)</td><td>0.3000**<br>(0.1485)</td></tr><tr><td>Colonial links<sub>ij,t-1</sub></td><td>0.6041*<br>(0.3408)</td><td>0.5745*<br>(0.3441)</td><td>0.3702**<br>(0.1551)</td><td>0.3773**<br>(0.1575)</td><td>0.5405<br>(0.3492)</td><td>0.5022<br>(0.3526)</td><td>0.3104**<br>(0.1485)</td><td>0.3199**<br>(0.1534)</td></tr><tr><td>BIT<sub>ij,t-1</sub></td><td>-0.6934***<br>(0.1708)</td><td>-0.7063***<br>(0.1692)</td><td>-0.3866**<br>(0.1730)</td><td>-0.3391*<br>(0.1782)</td><td>-0.7346***<br>(0.1692)</td><td>-0.7567***<br>(0.1676)</td><td>-0.5114***<br>(0.1833)</td><td>-0.4623**<br>(0.1909)</td></tr><tr><td>RTA<sub>ij,t-1</sub></td><td>-0.6204**<br>(0.2515)</td><td>-0.6385**<br>(0.2530)</td><td>0.3709***<br>(0.1398)</td><td>0.3363**<br>(0.1447)</td><td>-0.6671**<br>(0.2608)</td><td>-0.6846***<br>(0.2626)</td><td>0.3624**<br>(0.1526)</td><td>0.3220**<br>(0.1580)</td></tr><tr><td>Ln GDP<sub>i,t-1</sub></td><td>0.8362***<br>(0.2577)</td><td>0.8386***<br>(0.2558)</td><td>0.2004***<br>(0.0300)</td><td>-0.1195*<br>(0.0702)</td><td>0.8210***<br>(0.2589)</td><td>0.8242***<br>(0.2558)</td><td>0.2028***<br>(0.0302)</td><td>-0.0990<br>(0.0698)</td></tr><tr><td>Ln GDP<sub>j,t-1</sub></td><td>1.9802***<br>(0.1802)</td><td>1.9635***<br>(0.1778)</td><td>2.4362***<br>(0.1315)</td><td>2.4201***<br>(0.1279)</td><td>1.8389***<br>(0.1735)</td><td>1.8193***<br>(0.1706)</td><td>2.2892***<br>(0.1277)</td><td>2.2802***<br>(0.1284)</td></tr><tr><td>Trade openness<sub>j,t-1</sub></td><td>1.1750***<br>(0.1777)</td><td>1.1578***<br>(0.1775)</td><td>1.4634***<br>(0.1156)</td><td>1.4140***<br>(0.1158)</td><td>1.1263***<br>(0.1769)</td><td>1.1083***<br>(0.1761)</td><td>1.4033***<br>(0.1113)</td><td>1.3548***<br>(0.1132)</td></tr><tr><td>Regulatory quality<sub>j,t-1</sub></td><td>0.1976**<br>(0.0864)</td><td>0.2004**<br>(0.0907)</td><td>0.1847***<br>(0.0632)</td><td>0.1654**<br>(0.0650)</td><td>0.1744**<br>(0.0814)</td><td>0.1799**<br>(0.0856)</td><td>0.1708***<br>(0.0607)</td><td>0.1545**<br>(0.0621)</td></tr><tr><td>Ln productivity<sub>j,t-1</sub></td><td>-0.0406<br>(0.1155)</td><td>-0.1748<br>(0.1360)</td><td>0.2163***<br>(0.0730)</td><td>0.7602***<br>(0.1843)</td><td>0.0354<br>(0.1133)</td><td>-0.1158<br>(0.1430)</td><td>0.2344***<br>(0.0720)</td><td>0.7258***<br>(0.1713)</td></tr><tr><td>Ln tax burden<sub>j,t-1</sub></td><td>-0.9732<br>(0.8637)</td><td>-1.0849<br>(0.8601)</td><td>-0.3006<br>(0.6583)</td><td>-0.1956<br>(0.6736)</td><td>-0.4617<br>(0.8747)</td><td>-0.5172<br>(0.8856)</td><td>0.0377<br>(0.6469)</td><td>0.1495<br>(0.6670)</td></tr><tr><td>HCD<sub>ij,t-1</sub></td><td>-6.6256***<br>(1.0754)</td><td>-6.8341***<br>(1.0605)</td><td>-1.0753<br>(1.1411)</td><td>-0.4566<br>(1.1578)</td><td>-6.7128***<br>(1.1023)</td><td>-6.9120***<br>(1.0865)</td><td>-1.2443<br>(1.1580)</td><td>-0.6850<br>(1.1653)</td></tr><tr><td>Ln Labor freedom<sub>j,t-1</sub></td><td>1.7859***<br>(0.6236)</td><td>1.9592***<br>(0.6439)</td><td>2.3610***<br>(0.5189)</td><td>2.4041***<br>(0.5323)</td><td>1.8480***<br>(0.6469)</td><td>2.0308***<br>(0.6710)</td><td>2.3490***<br>(0.5195)</td><td>2.3783***<br>(0.5384)</td></tr><tr><td>Time - FE</td><td>No</td><td>Yes</td><td>No</td><td>Yes</td><td>No</td><td>Yes</td><td>No</td><td>Yes</td></tr><tr><td>Country - FE</td><td>No</td><td>No</td><td>Yes</td><td>Yes</td><td>No</td><td>No</td><td>Yes</td><td>Yes</td></tr><tr><td>R<sup>2</sup></td><td>0.5113</td><td>0.5213</td><td>0.7877</td><td>0.7993</td><td>0.5149</td><td>0.5254</td><td>0.7901</td><td>0.8015</td></tr><tr><td>Observations</td><td>19449</td><td>19449</td><td>19449</td><td>19449</td><td>19449</td><td>19449</td><td>19449</td><td>19449</td></tr></tbody></table>

Notes: The dependent variable is bilateral FDI stocks. Columns (1), (2), (3), (4) represent the results of the impact of global FDI regulatory restrictiveness index on cross-border investment and (5), (6), (7), (8) the results of sector-specific regulatory restrictiveness of FDI. Standard errors are reported in parentheses and clustered by country-pair level. *, **, *** denote significance at the 10%, 5% and 1% levels
<table><caption>Table 4: Gravity Estimation Results of Impacts of Restrictive Measures on FDI Stocks: OECD vs. Africa countries</caption><thead><tr><th rowspan="2">Model</th><th colspan="4">FDI RI global</th><th colspan="4">Sectoral FDI RI</th></tr><tr><th>(1)</th><th>(2)</th><th>(3)</th><th>(4)</th><th>(5)</th><th>(6)</th><th>(7)</th><th>(8)</th></tr></thead><tbody><tr><td>FDI RI Global<sub>j,t-1</sub></td><td>-2.5944<br>(3.6069)</td><td>4.2008<br>(5.6213)</td><td>-0.9225<br>(3.5504)</td><td>-1.6162<br>(3.7637)</td><td></td><td></td><td></td><td></td></tr><tr><td>FDI RI Primary<sub>j,t-1</sub></td><td></td><td></td><td></td><td></td><td>2.1988<br>(6.4698)</td><td>-15.8533<br>(19.2624)</td><td>2.2433<br>(4.1203)</td><td>3.2496<br>(4.0849)</td></tr><tr><td>FDI RI Secondary<sub>j,t-1</sub></td><td></td><td></td><td></td><td></td><td>18.9025<br>(14.9815)</td><td>-61.7042<br>(46.0373)</td><td>24.6712**<br>(9.6302)</td><td>34.5852***<br>(12.5787)</td></tr><tr><td>FDI RI Tertiary<sub>j,t-1</sub></td><td></td><td></td><td></td><td></td><td>-11.5606<br>(9.9956)</td><td>34.9320<br>(26.9728)</td><td>-13.7118**<br>(6.6913)</td><td>-20.7709**<br>(9.0402)</td></tr><tr><td>OECD dum<sub>j</sub> * FDI RI Global</td><td>0.3457<br>(4.5099)</td><td>-6.3800<br>(6.1340)</td><td>-0.7046<br>(4.2073)</td><td>-0.0712<br>(4.4800)</td><td></td><td></td><td></td><td></td></tr><tr><td>OECD dum<sub>j</sub> * FDI RI Primary</td><td></td><td></td><td></td><td></td><td>0.4262<br>(6.9738)</td><td>19.0093<br>(19.3923)</td><td>-0.4726<br>(4.2288)</td><td>-1.5105<br>(4.2092)</td></tr><tr><td>OECD dum<sub>j</sub> * FDI RI Secondary</td><td></td><td></td><td></td><td></td><td>-19.3509<br>(14.8862)</td><td>62.0336<br>(46.4781)</td><td>-25.3630***<br>(9.7697)</td><td>-34.9111***<br>(12.8049)</td></tr><tr><td>OECD dum<sub>j</sub> * FDI RI Tertiary</td><td></td><td></td><td></td><td></td><td>7.1248<br>(10.2036)</td><td>-40.4939<br>(27.3846)</td><td>10.4122<br>(7.0042)</td><td>17.1271*<br>(9.6787)</td></tr><tr><td>OECD dum<sub>j</sub></td><td>0.9745*<br>(0.5710)</td><td>-0.2000<br>(0.4262)</td><td>1.1963**<br>(0.5064)</td><td>1.9968*<br>(1.1026)</td><td>0.6024<br>(0.4660)</td><td>0.3135<br>(0.5090)</td><td>0.6126<br>(0.4326)</td><td>0.9346*<br>(0.4899)</td></tr><tr><td>Ln FDI<sub>ij,t-1</sub></td><td>0.1614**<br>(0.0664)</td><td>0.0909<br>(0.0755)</td><td>0.1970***<br>(0.0460)</td><td>0.0983**<br>(0.0489)</td><td>0.1471**<br>(0.0680)</td><td>0.0609<br>(0.0781)</td><td>0.1953***<br>(0.0436)</td><td>0.0960**<br>(0.0460)</td></tr><tr><td>Ln distance<sub>ij,t-1</sub></td><td>-2.0158***<br>(0.3097)</td><td>-2.0291***<br>(0.3126)</td><td>-1.0735***<br>(0.1492)</td><td>-1.0968***<br>(0.1550)</td><td>-2.0293***<br>(0.3105)</td><td>-2.0688***<br>(0.3099)</td><td>-1.0890***<br>(0.1630)</td><td>-1.1107***<br>(0.1723)</td></tr><tr><td>Common border<sub>ij,t-1</sub></td><td>-0.3751<br>(0.2878)</td><td>-0.3838<br>(0.2874)</td><td>-0.3946**<br>(0.1593)</td><td>-0.4014**<br>(0.1602)</td><td>-0.3320<br>(0.2994)</td><td>-0.3521<br>(0.2985)</td><td>-0.3441**<br>(0.1539)</td><td>-0.3476**<br>(0.1542)</td></tr><tr><td>Common lang<sub>ij,t-1</sub></td><td>0.4299<br>(0.2751)</td><td>0.4519<br>(0.2764)</td><td>0.2730*<br>(0.1535)</td><td>0.2564*<br>(0.1530)</td><td>0.4255<br>(0.2757)</td><td>0.4391<br>(0.2754)</td><td>0.2751*<br>(0.1509)</td><td>0.2567*<br>(0.1510)</td></tr><tr><td>Colonial links<sub>ij,t-1</sub></td><td>0.5617<br>(0.3478)</td><td>0.5116<br>(0.3472)</td><td>0.3795**<br>(0.1585)</td><td>0.3816**<br>(0.1581)</td><td>0.4791<br>(0.3557)</td><td>0.3929<br>(0.3608)</td><td>0.3200**<br>(0.1512)</td><td>0.3222**<br>(0.1531)</td></tr><tr><td>RTA<sub>ij,t-1</sub></td><td>-1.0383***<br>(0.3298)</td><td>-1.0083***<br>(0.3221)</td><td>0.4031**<br>(0.1568)</td><td>0.3800**<br>(0.1650)</td><td>-1.0757***<br>(0.3391)</td><td>-1.0353***<br>(0.3348)</td><td>0.4143**<br>(0.1743)</td><td>0.3940**<br>(0.1846)</td></tr><tr><td>BIT<sub>ij,t-1</sub></td><td>-0.6872***<br>(0.1853)</td><td>-0.7202***<br>(0.1858)</td><td>-0.3623*<br>(0.2012)</td><td>-0.3486*<br>(0.2064)</td><td>-0.7402***<br>(0.1824)</td><td>-0.7920***<br>(0.1838)</td><td>-0.5241**<br>(0.2171)</td><td>-0.5198**<br>(0.2239)</td></tr><tr><td>Ln GDP<sub>i,t-1</sub></td><td>0.7381***<br>(0.2615)</td><td>0.8008***<br>(0.2094)</td><td>0.2211***<br>(0.0310)</td><td>0.1099<br>(0.1160)</td><td>0.7229***<br>(0.2605)</td><td>0.8408***<br>(0.2208)</td><td>0.2225***<br>(0.0307)</td><td>0.1055<br>(0.0978)</td></tr><tr><td>Ln GDP<sub>j,t-1</sub></td><td>1.8161***<br>(0.1725)</td><td>1.9712***<br>(0.1715)</td><td>2.4428***<br>(0.1431)</td><td>2.4123***<br>(0.1469)</td><td>1.6377***<br>(0.1690)</td><td>1.8315***<br>(0.1787)</td><td>2.2595***<br>(0.1434)</td><td>2.2303***<br>(0.1461)</td></tr><tr><td>Trade openness<sub>j,t-1</sub></td><td>1.0658***<br>(0.1745)</td><td>1.2087***<br>(0.1805)</td><td>1.4650***<br>(0.1161)</td><td>1.4150***<br>(0.1235)</td><td>1.0249***<br>(0.1737)</td><td>1.2151***<br>(0.1897)</td><td>1.3935***<br>(0.1112)</td><td>1.3391***<br>(0.1159)</td></tr><tr><td>Regulatory quality<sub>j,t-1</sub></td><td>0.1396<br>(0.0967)</td><td>0.2267**<br>(0.1059)</td><td>0.1623**<br>(0.0645)</td><td>0.1628**<br>(0.0675)</td><td>0.1320<br>(0.0883)</td><td>0.2294**<br>(0.0988)</td><td>0.1575**<br>(0.0620)</td><td>0.1589**<br>(0.0648)</td></tr><tr><td>Ln productivity<sub>j,t-1</sub></td><td>0.5257**<br>(0.2137)</td><td>-0.5647<br>(0.5692)</td><td>0.5537***<br>(0.1551)</td><td>0.8370**<br>(0.3921)</td><td>0.5485**<br>(0.2419)</td><td>-0.9420<br>(0.7252)</td><td>0.5923***<br>(0.1529)</td><td>0.8760***<br>(0.3095)</td></tr><tr><td>Ln tax burden<sub>j,t-1</sub></td><td>-0.5215<br>(0.9023)</td><td>-1.2559<br>(1.0013)</td><td>-0.0989<br>(0.7090)</td><td>-0.0404<br>(0.7608)</td><td>-0.0899<br>(0.8914)</td><td>-0.8208<br>(1.0320)</td><td>0.1228<br>(0.6879)</td><td>0.2298<br>(0.7243)</td></tr><tr><td>HCD<sub>ij,t-1</sub></td><td>-6.1623***<br>(1.3752)</td><td>-6.0969***<br>(1.3453)</td><td>-0.5337<br>(1.5348)</td><td>-0.1014<br>(1.5285)</td><td>-6.2865***<br>(1.3563)</td><td>-6.2358***<br>(1.2903)</td><td>-1.0182<br>(1.5545)</td><td>-0.5708<br>(1.5509)</td></tr><tr><td>Ln Labor freedom<sub>j,t-1</sub></td><td>1.7078***<br>(0.6427)</td><td>1.9831***<br>(0.6534)</td><td>2.5221***<br>(0.5548)</td><td>2.6334***<br>(0.5807)</td><td>1.8549***<br>(0.6566)</td><td>2.2188***<br>(0.6646)</td><td>2.5635***<br>(0.5495)</td><td>2.6697***<br>(0.5742)</td></tr><tr><td>Time - FE</td><td>No</td><td>Yes</td><td>No</td><td>Yes</td><td>No</td><td>Yes</td><td>No</td><td>Yes</td></tr><tr><td>Country - FE</td><td>No</td><td>No</td><td>Yes</td><td>Yes</td><td>No</td><td>No</td><td>Yes</td><td>Yes</td></tr><tr><td>R<sup>2</sup></td><td>0.5173</td><td>0.5343</td><td>0.7955</td><td>0.8039</td><td>0.5221</td><td>0.5420</td><td>0.7982</td><td>0.8070</td></tr><tr><td>Observations</td><td>15213</td><td>15213</td><td>15213</td><td>15213</td><td>15213</td><td>15213</td><td>15213</td><td>15213</td></tr></tbody></table>

Notes: The dependent variable is bilateral FDI stocks. Columns (1), (2), (3), (4) represent the results of the impact of global FDI regulatory restrictiveness index on cross-border investment and (5), (6), (7), (8) the results of sector-specific regulatory restrictiveness of FDI. Standard errors are reported in parentheses and clustered by country-pair level. *, **, *** denote significance at the 10%, 5% and 1% levels.
<table><caption>Table 5: Splitting the Time into Two Sub-Periods</caption><thead><tr><th rowspan="3">Model</th><th colspan="6">2010-2014</th><th colspan="6">2015-2019</th></tr><tr><th colspan="2">OECD</th><th colspan="2">OECD vs Emerging</th><th colspan="2">OECD vs Africa</th><th colspan="2">OECD</th><th colspan="2">OECD vs Emerging</th><th colspan="2">OECD vs Africa</th></tr><tr><th>(1)</th><th>(2)</th><th>(3)</th><th>(4)</th><th>(5)</th><th>(6)</th><th>(7)</th><th>(8)</th><th>(9)</th><th>(10)</th><th>(11)</th><th>(12)</th></tr></thead><tbody><tr><td>FDI RI Global<sub>j,t-1</sub></td><td>-0.8035<br>(1.5949)</td><td></td><td>-2.9042***<br>(0.8700)</td><td></td><td>1.7913<br>(3.6596)</td><td></td><td>-0.6455**<br>(0.2530)</td><td></td><td>-2.9875***<br>(1.0427)</td><td></td><td>-2.1790<br>(4.4139)</td><td></td></tr><tr><td>FDI RI Primary</td><td></td><td>0.3649<br>(0.9116)</td><td></td><td>-0.7730<br>(1.8619)</td><td></td><td>0.5863<br>(4.7161)</td><td></td><td>0.4354**<br>(0.1771)</td><td></td><td>2.4512<br>(1.6878)</td><td></td><td>4.0204<br>(4.4847)</td><td></td></tr><tr><td>FDI RI Secondary</td><td></td><td>-3.4786<br>(2.3337)</td><td></td><td>4.7204**<br>(1.8759)</td><td></td><td>31.1855**<br>(14.1754)</td><td></td><td>0.2651<br>(0.3253)</td><td></td><td>0.4153<br>(1.8262)</td><td></td><td>32.8165**<br>(13.2715)</td><td></td></tr><tr><td>FDI RI Tertiary</td><td></td><td>0.6948<br>(2.1852)</td><td></td><td>-4.4398**<br>(2.0285)</td><td></td><td>-13.7059<br>(10.3219)</td><td></td><td>-1.2520***<br>(0.2832)</td><td></td><td>-4.8909**<br>(2.1449)</td><td></td><td>-18.3208*<br>(10.0437)</td><td></td></tr><tr><td>OECD dum<sub>j*</sub></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>FDI RI Global</td><td></td><td></td><td>2.6453<br>(1.9471)</td><td></td><td>-2.6827<br>(4.2966)</td><td></td><td></td><td>1.4609<br>(2.2472)</td><td></td><td></td><td>0.1616<br>(5.3016)</td><td></td><td></td></tr><tr><td>OECD dum<sub>j*</sub></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>FDI RI Primary</td><td></td><td></td><td></td><td>1.1214<br>(2.0444)</td><td></td><td>-0.1415<br>(4.7030)</td><td></td><td></td><td>-0.2583<br>(1.9557)</td><td></td><td>-1.6392<br>(4.7076)</td><td></td><td></td></tr><tr><td>OECD dum<sub>j*</sub></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>FDI RI Secondary</td><td></td><td></td><td></td><td>-7.9898***<br>(2.9645)</td><td></td><td>-35.0520**<br>(14.3767)</td><td></td><td></td><td>1.2850<br>(2.7646)</td><td></td><td>-31.6584**<br>(13.5071)</td><td></td><td></td></tr><tr><td>OECD dum<sub>j*</sub></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>FDI RI Tertiary</td><td></td><td></td><td></td><td>5.5254*<br>(3.1115)</td><td></td><td>14.6667<br>(10.6817)</td><td></td><td></td><td>-0.2923<br>(3.0882)</td><td></td><td>12.6691<br>(10.7487)</td><td></td><td></td></tr><tr><td>OECD dum<sub>j</sub></td><td></td><td></td><td>1.4975***<br>(0.4943)</td><td>1.2408**<br>(0.4877)</td><td>1.0291*<br>(0.5762)</td><td>0.7246<br>(0.4855)</td><td></td><td></td><td>1.0888<br>(1.2144)</td><td>0.5874<br>(0.9019)</td><td>1.5750<br>(1.5839)</td><td>0.3426<br>(0.6826)</td><td></td></tr><tr><td>R<sup>2</sup></td><td>0.7646</td><td>0.7655</td><td>0.7672</td><td>0.7687</td><td>0.7740</td><td>0.7756</td><td>0.9522</td><td>0.9523</td><td>0.8324</td><td>0.8365</td><td>0.8436</td><td>0.8448</td><td></td></tr><tr><td>Observations</td><td>6161</td><td>6161</td><td>9355</td><td>9355</td><td>7568</td><td>7568</td><td>6230</td><td>6230</td><td>9445</td><td>9445</td><td>7645</td><td>7645</td><td></td></tr></tbody></table>

Notes: The dependent variable is bilateral FDI stocks. Columns (1), (2), (3), (4), (5), and (6) represent the results of restrictive measures' impact in the period 2010-2104 and the other columns indicate the effects in 2015-2019. For space reasons, the results of the other control variables are omitted and the estimations include both country and time fixed effects. Standard errors are reported in parentheses and clustered by country-pair level. *, **, *** denote significance respectively at the 10%, 5%, and 1% levels.
<table><caption>Table 6: Gravity Estimation Results of Impacts of Restrictive Measures on FDI Stocks: OECD vs. BRICS and others Emerging Countries</caption><thead><tr><th rowspan="2">Model</th><th colspan="4">BRICS countries</th><th colspan="4">Emerging excluding BRICS</th></tr><tr><th colspan="2">FDI RI global</th><th colspan="2">Sectoral FDI RI</th><th colspan="2">FDI RI global</th><th colspan="2">Sectoral FDI RI</th></tr><tr><th></th><th>(1)</th><th>(2)</th><th>(3)</th><th>(4)</th><th>(5)</th><th>(6)</th><th>(7)</th><th>(8)</th></tr></thead><tbody><tr><td>FDI RI Global<sub>j,t-1</sub></td><td>0.0643<br>(1.5592)</td><td>-3.6988***<br>(1.0036)</td><td></td><td></td><td>4.1624<br>(3.7510)</td><td>-0.5836<br>(1.4247)</td><td></td><td></td></tr><tr><td>FDI RI Primary<sub>j,t-1</sub></td><td></td><td></td><td>1.8398<br>(2.3826)</td><td>2.9083<br>(1.7918)</td><td></td><td></td><td>0.9789<br>(8.3325)</td><td>2.0527<br>(2.4692)</td></tr><tr><td>FDI RI Secondary<sub>j,t-1</sub></td><td></td><td></td><td>-1.3180<br>(2.9618)</td><td>4.2798**<br>(1.9205)</td><td></td><td></td><td>28.6969<br>(21.3504)</td><td>8.8480<br>(8.0209)</td></tr><tr><td>FDI RI Tertiary<sub>j,t-1</sub></td><td></td><td></td><td>-0.5023<br>(4.5422)</td><td>-8.7256***<br>(2.6022)</td><td></td><td></td><td>-7.2014**<br>(3.6155)</td><td>-5.6583<br>(3.5065)</td></tr><tr><td>OECD dum<sub>j</sub> * FDI RI Global</td><td>-2.2348<br>(2.7489)</td><td>2.5939<br>(1.9748)</td><td></td><td></td><td>-6.3781<br>(3.9922)</td><td>-1.0063<br>(2.3426)</td><td></td><td></td></tr><tr><td>OECD dum<sub>j</sub> * FDI RI Primary</td><td></td><td></td><td>0.2945<br>(3.1266)</td><td>-1.3183<br>(1.9792)</td><td></td><td></td><td>1.9154<br>(8.5453)</td><td>-0.3630<br>(2.6292)</td></tr><tr><td>OECD dum<sub>j</sub> * FDI RI Secondary</td><td></td><td></td><td>2.6654<br>(3.8246)</td><td>-4.0174<br>(2.8371)</td><td></td><td></td><td>-28.6064<br>(21.1684)</td><td>-8.8681<br>(8.3190)</td></tr><tr><td>OECD dum<sub>j</sub> * FDI RI Tertiary</td><td></td><td></td><td>-4.6841<br>(5.4679)</td><td>5.3995<br>(3.4629)</td><td></td><td></td><td>2.0828<br>(4.2043)</td><td>1.9990<br>(4.2348)</td></tr><tr><td>OECD dum<sub>j</sub></td><td>-1.5258***<br>(0.4154)</td><td>1.1180*<br>(0.6439)</td><td>-1.2906***<br>(0.3991)</td><td>0.6786<br>(0.5045)</td><td>0.6778<br>(0.5587)</td><td>2.7841***<br>(0.8244)</td><td>0.4047<br>(0.5338)</td><td>2.4006***<br>(0.7038)</td></tr><tr><td>Ln FDI<sub>ij,t-1</sub></td><td>0.0992<br>(0.0724)</td><td>0.1003**<br>(0.0479)</td><td>0.0871<br>(0.0741)</td><td>0.0979**<br>(0.0452)</td><td>0.0945<br>(0.0762)</td><td>0.0955*<br>(0.0490)</td><td>0.0761<br>(0.0779)</td><td>0.0941**<br>(0.0461)</td></tr><tr><td>Ln distance<sub>ij,t-1</sub></td><td>-1.9008***<br>(0.2753)</td><td>-1.1124***<br>(0.1413)</td><td>-1.9283***<br>(0.2816)</td><td>-1.1421***<br>(0.1543)</td><td>-1.9148***<br>(0.2918)</td><td>-1.1058***<br>(0.1519)</td><td>-1.9452***<br>(0.2962)</td><td>-1.1328***<br>(0.1683)</td></tr><tr><td>Common border<sub>ij,t-1</sub></td><td>-0.4804*<br>(0.2778)</td><td>-0.4245***<br>(0.1530)</td><td>-0.4516<br>(0.2864)</td><td>-0.3922***<br>(0.1472)</td><td>-0.4263<br>(0.2881)</td><td>-0.4216***<br>(0.1590)</td><td>-0.3842<br>(0.2989)</td><td>-0.3759**<br>(0.1515)</td></tr><tr><td>Common lang<sub>ij,t-1</sub></td><td>0.5240*<br>(0.2721)</td><td>0.2685*<br>(0.1515)</td><td>0.5160*<br>(0.2718)</td><td>0.2867*<br>(0.1507)</td><td>0.5071*<br>(0.2843)</td><td>0.2776*<br>(0.1528)</td><td>0.4996*<br>(0.2852)</td><td>0.2779*<br>(0.1511)</td></tr><tr><td>Colonial links<sub>ij,t-1</sub></td><td>0.5421<br>(0.3455)</td><td>0.3781**<br>(0.1569)</td><td>0.4658<br>(0.3544)</td><td>0.3217**<br>(0.1523)</td><td>0.5796<br>(0.3552)</td><td>0.3791**<br>(0.1592)</td><td>0.4821<br>(0.3625)</td><td>0.3153**<br>(0.1535)</td></tr><tr><td>RTA<sub>ij,t-1</sub></td><td>-0.6561**<br>(0.2591)</td><td>0.3362**<br>(0.1495)</td><td>-0.7011***<br>(0.2688)</td><td>0.3249**<br>(0.1650)</td><td>-0.7178**<br>(0.2830)</td><td>0.3958**<br>(0.1618)</td><td>-0.7604***<br>(0.2911)</td><td>0.3923**<br>(0.1795)</td></tr><tr><td>BIT<sub>ij,t-1</sub></td><td>-0.7016***<br>(0.1722)</td><td>-0.3301*<br>(0.1831)</td><td>-0.7481***<br>(0.1699)</td><td>-0.4597**<br>(0.1978)</td><td>-0.7425***<br>(0.1825)</td><td>-0.3570*<br>(0.2012)</td><td>-0.8080***<br>(0.1809)</td><td>-0.5139**<br>(0.2204)</td></tr><tr><td>Ln GDP<sub>i,t-1</sub></td><td>0.8474***<br>(0.2334)</td><td>-0.0899<br>(0.0837)</td><td>0.8368***<br>(0.2319)</td><td>-0.0771<br>(0.0794)</td><td>0.7964***<br>(0.2658)</td><td>-0.1296<br>(0.0933)</td><td>0.7860***<br>(0.2514)</td><td>-0.0814<br>(0.0885)</td></tr><tr><td>Ln GDP<sub>j,t-1</sub></td><td>2.0854***<br>(0.1824)</td><td>2.4323***<br>(0.1325)</td><td>1.9580***<br>(0.1820)</td><td>2.2805***<br>(0.1338)</td><td>1.9212***<br>(0.1766)</td><td>2.4128***<br>(0.1402)</td><td>1.7696***<br>(0.1713)</td><td>2.2578***<br>(0.1418)</td></tr><tr><td>Trade openness<sub>j,t-1</sub></td><td>1.2512***<br>(0.1780)</td><td>1.4381***<br>(0.1160)</td><td>1.2087***<br>(0.1788)</td><td>1.3695***<br>(0.1142)</td><td>1.1718***<br>(0.1802)</td><td>1.4125***<br>(0.1187)</td><td>1.1625***<br>(0.1845)</td><td>1.3610***<br>(0.1136)</td></tr><tr><td>Regulatory quality<sub>j,t-1</sub></td><td>0.2356**<br>(0.0957)</td><td>0.1869***<br>(0.0673)</td><td>0.2121**<br>(0.0914)</td><td>0.1733***<br>(0.0647)</td><td>0.2152**<br>(0.0967)</td><td>0.1597**<br>(0.0661)</td><td>0.2188**<br>(0.0924)</td><td>0.1599**<br>(0.0637)</td></tr><tr><td>Ln productivity<sub>j,t-1</sub></td><td>-0.5885***<br>(0.2093)</td><td>0.6638***<br>(0.2233)</td><td>-0.5925**<br>(0.2904)</td><td>0.6601***<br>(0.1875)</td><td>-0.5148<br>(0.3685)</td><td>0.8445***<br>(0.3029)</td><td>-0.7243<br>(0.4934)</td><td>0.7039**<br>(0.2760)</td></tr><tr><td>Ln tax burden<sub>j,t-1</sub></td><td>-1.4698<br>(0.9033)</td><td>-0.2544<br>(0.6799)</td><td>-0.8940<br>(0.9463)</td><td>0.1406<br>(0.6715)</td><td>-1.0732<br>(0.9222)</td><td>-0.0828<br>(0.7308)</td><td>-0.6601<br>(0.9579)</td><td>0.1601<br>(0.7126)</td></tr><tr><td>HCD<sub>ij,t-1</sub></td><td>-6.1903***<br>(1.0716)</td><td>-0.4411<br>(1.2010)</td><td>-6.3859***<br>(1.0858)</td><td>-0.4920<br>(1.2232)</td><td>-7.1014***<br>(1.2259)</td><td>0.0522<br>(1.4662)</td><td>-7.2965***<br>(1.2285)</td><td>-0.4484<br>(1.4856)</td></tr><tr><td>Ln Labor freedom<sub>j,t-1</sub></td><td>2.0855***<br>(0.6565)</td><td>2.5584***<br>(0.5395)</td><td>2.1380***<br>(0.6784)</td><td>2.5483***<br>(0.5431)</td><td>2.1289***<br>(0.6574)</td><td>2.6242***<br>(0.5673)</td><td>2.3356***<br>(0.6896)</td><td>2.6650***<br>(0.5693)</td></tr><tr><td>Time - FE</td><td>Yes</td><td>Yes</td><td>Yes</td><td>Yes</td><td>Yes</td><td>Yes</td><td>Yes</td><td>Yes</td></tr><tr><td>Country - FE</td><td>No</td><td>Yes</td><td>No</td><td>Yes</td><td>No</td><td>Yes</td><td>No</td><td>Yes</td></tr><tr><td>R<sup>2</sup></td><td>0.5141</td><td>0.7938</td><td>0.5183</td><td>0.7967</td><td>0.5269</td><td>0.8041</td><td>0.5333</td><td>0.8065</td></tr><tr><td>Observations</td><td>16627</td><td>16627</td><td>16627</td><td>16627</td><td>16275</td><td>16275</td><td>16275</td><td>16275</td></tr></tbody></table>

Notes: The dependent variable is bilateral FDI stocks. Columns (1), (2), (3), (4) represent the results of the impact of FDI regulatory restrictiveness index on cross-border investment between OECD and BRICS countries and (5), (6), (7), (8) the results on FDI among. OECD and emerging excluding BRICS countries. Standard errors are reported in parentheses and clustered by country- pair level. *, **, *** denote significance respectively at the 10% 5% and 1% levels.
<table><caption>Table 7: OECD outward and inward FDI by service sector (% of service FDI)</caption><thead><tr><th></th><th>Years</th><th>2015</th><th>2016</th><th>2017</th><th>2018</th><th>2019</th></tr></thead><tbody><tr><td rowspan="2">Financial and insurance activities</td><td>Inward</td><td>60.57</td><td>62.2</td><td>62.04</td><td>55.07</td><td>59.57</td></tr><tr><td>Outward</td><td>65.44</td><td>65.71</td><td>66.87</td><td>65.19</td><td>68.25</td></tr><tr><td rowspan="2">Wholesale and retail trade repair of motor vehicles and motorcycles</td><td>Inward</td><td>11.89</td><td>11.49</td><td>13.79</td><td>12.57</td><td>13.6</td></tr><tr><td>Outward</td><td>8.7</td><td>8.94</td><td>8.56</td><td>9.03</td><td>7.83</td></tr><tr><td rowspan="2">Transportation and storage</td><td>Inward</td><td>2.25</td><td>2.38</td><td>2.56</td><td>2.98</td><td>2.59</td></tr><tr><td>Outward</td><td>1.58</td><td>1.52</td><td>1.59</td><td>1.88</td><td>1.77</td></tr></tbody></table>

Source: Author's calculation based on OECD FDI data
<table><caption>Table 8: The Impact of FDI Restrictions in the Financial Sector on FDI Stocks: Intra- OECD</caption><thead><tr><th rowspan="3">Specification<br>Dependant variable<br>Years</th><th colspan="8">PPML Estimate</th></tr><tr><th colspan="4">Global financial sector</th><th colspan="4">Disaggregated financial sector</th></tr><tr><th>(1)</th><th>(2)</th><th>(3)</th><th>(4)</th><th>(5)</th><th>(6)</th><th>(7)</th><th>(8)</th></tr></thead><tbody><tr><td>FDI RI Financial<sub>j,t-1</sub></td><td>-0.5106<br>(1.4064)</td><td>-0.2140<br>(1.4145)</td><td>-0.0402<br>(1.5903)</td><td>-0.0667<br>(1.5515)</td><td></td><td></td><td></td><td></td></tr><tr><td>FDI RI Banking<sub>j,t-1</sub></td><td></td><td></td><td></td><td></td><td>0.5432<br>(1.5084)</td><td>0.2900<br>(1.5149)</td><td>5.2978***<br>(1.4446)</td><td>4.9846***<br>(1.3903)</td></tr><tr><td>FDI RI Insurance<sub>j,t-1</sub></td><td></td><td></td><td></td><td></td><td>1.3693<br>(1.7819)</td><td>2.0304<br>(1.6664)</td><td>-2.1418<br>(2.2261)</td><td>-1.8860<br>(2.1842)</td></tr><tr><td>FDI RI Other finance<sub>j,t-1</sub></td><td></td><td></td><td></td><td></td><td>-1.9266*<br>(1.1159)</td><td>-1.8297*<br>(1.0111)</td><td>-5.8821***<br>(1.4426)</td><td>-5.6653***<br>(1.3660)</td></tr><tr><td>FDI RI Business services<sub>j,t-1</sub></td><td></td><td></td><td></td><td></td><td>-1.4061***<br>(0.5220)</td><td>-1.2451**<br>(0.4949)</td><td>-2.6909***<br>(0.7163)</td><td>-2.4932***<br>(0.7058)</td></tr><tr><td>Ln FDI<sub>ij,t-1</sub></td><td>1.3941***<br>(0.0608)</td><td>1.4429***<br>(0.0632)</td><td>0.6669***<br>(0.0623)</td><td>0.7428***<br>(0.0641)</td><td>1.3746***<br>(0.0586)</td><td>1.4238***<br>(0.0621)</td><td>0.6155***<br>(0.0600)</td><td>0.6797***<br>(0.0639)</td></tr><tr><td>Ln distance<sub>ij,t-1</sub></td><td>-0.7444***<br>(0.1468)</td><td>-0.6897***<br>(0.1233)</td><td>-0.7825***<br>(0.1072)</td><td>-0.7114***<br>(0.1047)</td><td>-0.7823***<br>(0.1345)</td><td>-0.7397***<br>(0.1097)</td><td>-0.8609***<br>(0.1200)</td><td>-0.8068***<br>(0.1164)</td></tr><tr><td>Common border<sub>ij,t-1</sub></td><td>-0.2543**<br>(0.1187)</td><td>-0.2626**<br>(0.1056)</td><td>-0.2819**<br>(0.1141)</td><td>-0.2707**<br>(0.1092)</td><td>-0.2109*<br>(0.1173)</td><td>-0.2232**<br>(0.1038)</td><td>-0.2030*<br>(0.1157)</td><td>-0.1996*<br>(0.1130)</td></tr><tr><td>Common lang<sub>ij,t-1</sub></td><td>0.1098<br>(0.1180)</td><td>0.0793<br>(0.1115)</td><td>0.1088<br>(0.1109)</td><td>0.0989<br>(0.1049)</td><td>0.1156<br>(0.1161)</td><td>0.0793<br>(0.1081)</td><td>0.1527<br>(0.1127)</td><td>0.1380<br>(0.1082)</td></tr><tr><td>Colonial links<sub>ij,t-1</sub></td><td>0.0846<br>(0.1764)</td><td>0.0752<br>(0.1635)</td><td>0.2522**<br>(0.1221)</td><td>0.2438**<br>(0.1197)</td><td>0.0573<br>(0.1723)</td><td>0.0475<br>(0.1600)</td><td>0.1931*<br>(0.1155)</td><td>0.1888*<br>(0.1143)</td></tr><tr><td>RTA<sub>ij,t-1</sub></td><td>-0.4974***<br>(0.1392)</td><td>-0.4432***<br>(0.1379)</td><td>0.1647<br>(0.1203)</td><td>0.2137*<br>(0.1123)</td><td>-0.5291***<br>(0.1374)</td><td>-0.4747***<br>(0.1334)</td><td>0.1311<br>(0.1285)</td><td>0.1687<br>(0.1211)</td></tr><tr><td>BIT<sub>ij,t-1</sub></td><td>-0.2043*<br>(0.1124)</td><td>-0.1899*<br>(0.1064)</td><td>-0.1643<br>(0.1534)</td><td>-0.1503<br>(0.1454)</td><td>-0.2381**<br>(0.1001)</td><td>-0.2342**<br>(0.0946)</td><td>-0.1655<br>(0.1860)</td><td>-0.1598<br>(0.1775)</td></tr><tr><td>Ln GDP<sub>i,t-1</sub></td><td>0.2057***<br>(0.0267)</td><td>0.1428<br>(0.1017)</td><td>0.2177***<br>(0.0255)</td><td>-0.2773<br>(0.1867)</td><td>0.2072***<br>(0.0275)</td><td>0.1494<br>(0.1064)</td><td>0.2162***<br>(0.0256)</td><td>-0.2623<br>(0.1843)</td></tr><tr><td>Ln GDP<sub>j,t-1</sub></td><td>0.6205***<br>(0.1141)</td><td>0.6434***<br>(0.1095)</td><td>1.6250***<br>(0.1431)</td><td>1.5791***<br>(0.1399)</td><td>0.4719***<br>(0.1046)</td><td>0.5214***<br>(0.0984)</td><td>1.1968***<br>(0.1268)</td><td>1.1815***<br>(0.1252)</td></tr><tr><td>Trade openness<sub>j,t-1</sub></td><td>0.3725***<br>(0.0917)</td><td>0.3866***<br>(0.0938)</td><td>0.9617***<br>(0.1005)</td><td>0.9320***<br>(0.0988)</td><td>0.2868***<br>(0.0861)</td><td>0.3086***<br>(0.0876)</td><td>0.7429***<br>(0.0924)</td><td>0.7265***<br>(0.0916)</td></tr><tr><td>Regulatory quality<sub>j,t-1</sub></td><td>0.1148***<br>(0.0361)</td><td>0.0529<br>(0.0403)</td><td>0.1705***<br>(0.0425)</td><td>0.1157***<br>(0.0443)</td><td>0.0995***<br>(0.0368)</td><td>0.0387<br>(0.0397)</td><td>0.1143***<br>(0.0378)</td><td>0.0610<br>(0.0405)</td></tr><tr><td>Ln productivity<sub>j,t-1</sub></td><td>0.0505<br>(0.5397)</td><td>0.2934<br>(0.5372)</td><td>0.7395*<br>(0.4165)</td><td>0.8965**<br>(0.4096)</td><td>0.1869<br>(0.5504)</td><td>0.4409<br>(0.5389)</td><td>0.9066**<br>(0.4369)</td><td>1.0488**<br>(0.4262)</td></tr><tr><td>Ln tax burden<sub>j,t-1</sub></td><td>-0.0927<br>(0.6541)</td><td>0.0213<br>(0.6232)</td><td>-0.1190<br>(0.6335)</td><td>-0.0018<br>(0.6250)</td><td>-0.5972<br>(0.8737)</td><td>-0.3109<br>(0.8334)</td><td>-1.6285**<br>(0.8286)</td><td>-1.3788*<br>(0.8336)</td></tr><tr><td>HCD<sub>ij,t-1</sub></td><td>-0.9563<br>(0.9467)</td><td>-1.6821*<br>(0.9099)</td><td>0.3661<br>(1.2280)</td><td>0.0255<br>(1.1694)</td><td>-1.0666<br>(0.9583)</td><td>-1.8185**<br>(0.9254)</td><td>0.2139<br>(1.3182)</td><td>-0.1305<br>(1.2719)</td></tr><tr><td>Ln Labor freedom<sub>j,t-1</sub></td><td>0.6489*<br>(0.3857)</td><td>0.5062<br>(0.3144)</td><td>1.8040***<br>(0.4476)</td><td>1.6772***<br>(0.4324)</td><td>0.8444*<br>(0.4975)</td><td>0.6977*<br>(0.4198)</td><td>1.8467***<br>(0.5470)</td><td>1.7227***<br>(0.5369)</td></tr><tr><td>Time - FE</td><td>No</td><td>Yes</td><td>No</td><td>Yes</td><td>No</td><td>Yes</td><td>No</td><td>Yes</td></tr><tr><td>Country - FE</td><td>No</td><td>No</td><td>Yes</td><td>Yes</td><td>No</td><td>No</td><td>Yes</td><td>Yes</td></tr><tr><td>R<sup>2</sup></td><td>0.7643</td><td>0.7742</td><td>0.8326</td><td>0.8368</td><td>0.7663</td><td>0.7760</td><td>0.8398</td><td>0.8431</td></tr><tr><td>Observations</td><td>12391</td><td>12391</td><td>12391</td><td>12391</td><td>12391</td><td>12391</td><td>12391</td><td>12391</td></tr></tbody></table>

Notes: The dependent variable is bilateral FDI stocks. Columns (1), (2), (3), (4) represent the results of the impact of global financial sector restrictiveness index on cross-border investment and (5), (6), (7), (8) the results of disaggregated financial sector. Standard errors are reported in parentheses and clustered by country- pair level. *, **, *** denote significance respectively at the 10% 5% and 1% levels.
<table><caption>Table 9: Exports of Primary and Manufacturing Goods from 2015-2019</caption><thead><tr><th>Countries</th><th>Years</th><th>Primary commodities precious stones and non-monetary gold</th><th>Manufactured goods</th></tr></thead><tbody><tr><td>Africa</td><td>2015</td><td>5,68E+04</td><td>2,77E+04</td></tr><tr><td>Emerging</td><td>2015</td><td>1,32E+06</td><td>9,07E+05</td></tr><tr><td>Africa</td><td>2016</td><td>5,56E+04</td><td>2,77E+04</td></tr><tr><td>Emerging</td><td>2016</td><td>1,26E+06</td><td>8,46E+05</td></tr><tr><td>Africa</td><td>2017</td><td>6,58E+04</td><td>2,91E+04</td></tr><tr><td>Emerging</td><td>2017</td><td>1,48E+06</td><td>9,23E+05</td></tr><tr><td>Africa</td><td>2018</td><td>6,82E+04</td><td>3,19E+04</td></tr><tr><td>Emerging</td><td>2018</td><td>1,60E+06</td><td>9,89E+05</td></tr><tr><td>Africa</td><td>2019</td><td>6,57E+04</td><td>2,93E+04</td></tr><tr><td>Emerging</td><td>2019</td><td>1,49E+06</td><td>9,83E+05</td></tr></tbody></table>

Africa includes North and South African countries. Emerging countries include Central and South Asia, Eastern and South-Eastern Asia and Latin America

Source: Author's calculation based on UNCTAD data
<table><caption>Table 10: The Impact of FDI Restrictive Measures in the Agricultural and Manufacturing Sectors on FDI Stocks: OECD vs. Emerging Countries</caption><thead><tr><th rowspan="3">Specification<br>Dependant variable<br>Years</th><th colspan="8">PPML Estimate</th></tr><tr><th colspan="4">Total Emerging countries</th><th colspan="4">BRICS countries</th></tr><tr><th>(1)</th><th>(2)</th><th>(3)</th><th>(4)</th><th>(5)</th><th>(6)</th><th>(7)</th><th>(8)</th></tr></thead><tbody><tr><td>FDI RI Agriculture<sub>j,t-1</sub></td><td>0.5197<br>(0.6648)</td><td>0.8793<br>(0.7391)</td><td>-0.1722<br>(0.6100)</td><td>-0.6223<br>(0.6176)</td><td>1.1153<br>(0.8349)</td><td>1.9881**<br>(0.9649)</td><td>0.2157<br>(0.8271)</td><td>0.2306<br>(0.8243)</td></tr><tr><td>FDI RI Manufacturing<sub>j,t-1</sub></td><td>-1.7103<br>(1.9333)</td><td>-0.9988<br>(2.0439)</td><td>-2.5898*<br>(1.3222)</td><td>-2.7588**<br>(1.3264)</td><td>-3.4662<br>(2.3242)</td><td>-1.5959<br>(2.2909)</td><td>-4.8008***<br>(1.5543)</td><td>-4.8333***<br>(1.6202)</td></tr><tr><td>OECD dum<sub>j</sub> * FDI RI Agriculture</td><td>-0.9399<br>(1.3006)</td><td>-1.4405<br>(1.3662)</td><td>-1.2059<br>(0.9178)</td><td>-0.5464<br>(0.9725)</td><td>-1.4877<br>(1.4050)</td><td>-2.9163*<br>(1.5840)</td><td>-1.5352<br>(1.0672)</td><td>-1.3641<br>(1.0940)</td></tr><tr><td>OECD dum<sub>j</sub> * FDI RI Manufacturing</td><td>3.5029<br>(3.3960)</td><td>2.3922<br>(3.4249)</td><td>2.9871<br>(2.1544)</td><td>3.8300*<br>(2.1974)</td><td>5.2172<br>(3.6057)</td><td>2.6126<br>(3.5207)</td><td>5.2991**<br>(2.2957)</td><td>5.7823**<br>(2.3892)</td></tr><tr><td>OECD dum<sub>j</sub></td><td>-0.3915<br>(0.3540)</td><td>-0.5786*<br>(0.3421)</td><td>0.5501**<br>(0.2419)</td><td>2.1064***<br>(0.6114)</td><td>-0.4175<br>(0.3527)</td><td>-1.6086***<br>(0.3982)</td><td>0.1650<br>(0.2385)</td><td>1.8455**<br>(0.8667)</td></tr><tr><td>Ln FDI<sub>j,t-1</sub></td><td>0.1807***<br>(0.0644)</td><td>0.1214<br>(0.0745)</td><td>0.2175***<br>(0.0454)</td><td>0.1026**<br>(0.0488)</td><td>0.1667***<br>(0.0642)</td><td>0.1039<br>(0.0741)</td><td>0.2051***<br>(0.0448)</td><td>0.1018**<br>(0.0486)</td></tr><tr><td>Ln distance<sub>j,t-1</sub></td><td>-1.9593***<br>(0.2646)</td><td>-1.9546***<br>(0.2688)</td><td>-1.0663***<br>(0.1383)</td><td>-1.0953***<br>(0.1402)</td><td>-1.9180***<br>(0.2732)</td><td>-1.9208***<br>(0.2790)</td><td>-1.0580***<br>(0.1407)</td><td>-1.0837***<br>(0.1436)</td></tr><tr><td>Common border<sub>j,t-1</sub></td><td>-0.5461*<br>(0.2790)</td><td>-0.5182*<br>(0.2785)</td><td>-0.4234***<br>(0.1573)</td><td>-0.4494***<br>(0.1584)</td><td>-0.5201*<br>(0.2798)</td><td>-0.5043*<br>(0.2804)</td><td>-0.4192***<br>(0.1594)</td><td>-0.4303***<br>(0.1600)</td></tr><tr><td>Common lang<sub>j,t-1</sub></td><td>0.4760*<br>(0.2802)</td><td>0.4889*<br>(0.2805)</td><td>0.2905*<br>(0.1536)</td><td>0.2638*<br>(0.1542)</td><td>0.4652*<br>(0.2799)</td><td>0.4938*<br>(0.2811)</td><td>0.2723*<br>(0.1547)</td><td>0.2433<br>(0.1556)</td></tr><tr><td>Colonial links<sub>j,t-1</sub></td><td>0.6308*<br>(0.3474)</td><td>0.6007*<br>(0.3506)</td><td>0.4069***<br>(0.1514)</td><td>0.4085***<br>(0.1527)</td><td>0.6041*<br>(0.3505)</td><td>0.5666<br>(0.3526)</td><td>0.4019***<br>(0.1521)</td><td>0.4067***<br>(0.1525)</td></tr><tr><td>RTA<sub>j,t-1</sub></td><td>-0.6103**<br>(0.2523)</td><td>-0.6306**<br>(0.2540)</td><td>0.3817***<br>(0.1413)</td><td>0.3511**<br>(0.1468)</td><td>-0.6441**<br>(0.2610)</td><td>-0.6491**<br>(0.2613)</td><td>0.3780***<br>(0.1451)</td><td>0.3439**<br>(0.1510)</td></tr><tr><td>BIT<sub>j,t-1</sub></td><td>-0.6762***<br>(0.1701)</td><td>-0.6871***<br>(0.1683)</td><td>-0.3457**<br>(0.1677)</td><td>-0.3075*<br>(0.1697)</td><td>-0.6454***<br>(0.1742)</td><td>-0.6676***<br>(0.1730)</td><td>-0.3193*<br>(0.1731)</td><td>-0.2900*<br>(0.1748)</td></tr><tr><td>Ln GDP<sub>t-1</sub></td><td>0.8340***<br>(0.2573)</td><td>0.8367***<br>(0.2553)</td><td>0.1939***<br>(0.0291)</td><td>-0.1300*<br>(0.0734)</td><td>0.8303***<br>(0.2566)</td><td>0.8507***<br>(0.2322)</td><td>0.1815***<br>(0.0278)</td><td>-0.1137<br>(0.0980)</td></tr><tr><td>Ln GDP<sub>t-1</sub></td><td>2.0384***<br>(0.1861)</td><td>2.0145***<br>(0.1830)</td><td>2.4175***<br>(0.1287)</td><td>2.4056***<br>(0.1278)</td><td>2.0629***<br>(0.1882)</td><td>2.1486***<br>(0.1893)</td><td>2.4730***<br>(0.1322)</td><td>2.4147***<br>(0.1320)</td></tr><tr><td>Trade openness<sub>j,t-1</sub></td><td>1.2286***<br>(0.1711)</td><td>1.2098***<br>(0.1711)</td><td>1.4655***<br>(0.1130)</td><td>1.4102***<br>(0.1145)</td><td>1.2512***<br>(0.1716)</td><td>1.3123***<br>(0.1738)</td><td>1.5089***<br>(0.1130)</td><td>1.4267***<br>(0.1170)</td></tr><tr><td>Regulatory quality<sub>j,t-1</sub></td><td>0.1632*<br>(0.0838)</td><td>0.1615*<br>(0.0864)</td><td>0.1508**<br>(0.0623)</td><td>0.1312**<br>(0.0633)</td><td>0.1664*<br>(0.0861)</td><td>0.1874**<br>(0.0896)</td><td>0.1613**<br>(0.0637)</td><td>0.1473**<br>(0.0643)</td></tr><tr><td>Ln productivity<sub>j,t-1</sub></td><td>-0.0913<br>(0.1144)</td><td>-0.2436*<br>(0.1456)</td><td>0.1941***<br>(0.0744)</td><td>0.7953***<br>(0.2137)</td><td>-0.0796<br>(0.1176)</td><td>-0.6819***<br>(0.2179)</td><td>0.1623**<br>(0.0797)</td><td>0.7530**<br>(0.2998)</td></tr><tr><td>Ln tax burden<sub>j,t-1</sub></td><td>-1.3062<br>(0.9781)</td><td>-1.4412<br>(0.9733)</td><td>-0.5393<br>(0.6867)</td><td>-0.3775<br>(0.7153)</td><td>-1.3303<br>(0.9801)</td><td>-1.8883*<br>(1.0297)</td><td>-0.5805<br>(0.6904)</td><td>-0.3932<br>(0.7337)</td></tr><tr><td>HCD<sub>j,t-1</sub></td><td>-6.6406***<br>(1.0768)</td><td>-6.8512***<br>(1.0651)</td><td>-1.1348<br>(1.1547)</td><td>-0.4977<br>(1.1720)</td><td>-6.0828***<br>(1.0807)</td><td>-6.2345***<br>(1.0705)</td><td>-1.2969<br>(1.2277)</td><td>-0.7618<br>(1.2444)</td></tr><tr><td>Ln Labor freedom<sub>j,t-1</sub></td><td>1.5927**<br>(0.6547)</td><td>1.7265**<br>(0.6774)</td><td>2.0407***<br>(0.5275)</td><td>2.1382***<br>(0.5319)</td><td>1.6244**<br>(0.6616)</td><td>1.7586**<br>(0.6903)</td><td>2.1515***<br>(0.5357)</td><td>2.2519***<br>(0.5386)</td></tr><tr><td>Time - FE</td><td>No</td><td>Yes</td><td>No</td><td>Yes</td><td>No</td><td>Yes</td><td>No</td><td>Yes</td></tr><tr><td>Country - FE</td><td>No</td><td>No</td><td>Yes</td><td>Yes</td><td>No</td><td>No</td><td>Yes</td><td>Yes</td></tr><tr><td>R<sup>2</sup></td><td>0.5114</td><td>0.5213</td><td>0.7875</td><td>0.7991</td><td>0.4996</td><td>0.5144</td><td>0.7834</td><td>0.7935</td></tr><tr><td>Observations</td><td>19449</td><td>19449</td><td>19449</td><td>19449</td><td>16627</td><td>16627</td><td>16627</td><td>16627</td></tr></tbody></table>

Notes: The dependent variable is bilateral FDI stocks. Columns (1), (2), (3), (4) represent the results of the impact on total emerging countries and (5), (6), (7), (8) the results on BRICS countries. Standard errors are reported respectively at the 10% in parentheses and clustered by country-pair level. *, **, *** denote significance, 5% and 1% levels.
<table><caption>Table 11: The Impact of FDI Restrictive Measures in the Agriculture and Mining sectors on FDI stocks: OECD vs. Africa Countries</caption><thead><tr><th rowspan="3">Specification<br>Dependant variable<br>Years<br>Model</th><th colspan="4">PPML Estimate</th></tr><tr><th colspan="4">FDI<sub>ij,t</sub><br>GDPdeflator<sub>ij,t</sub><br>2010-2019</th></tr><tr><th>(1)</th><th>(2)</th><th>(3)</th><th>(4)</th></tr></thead><tbody><tr><td>FDI RI Agriculture<sub>j,t-1</sub></td><td>4.4306<br>(6.3253)</td><td>-15.9606<br>(15.4882)</td><td>6.7824<br>(5.2212)</td><td>6.8618<br>(5.0804)</td></tr><tr><td>FDI RI Mining Quarrying<sub>j,t-1</sub></td><td>-52.9798*<br>(29.1565)</td><td>71.6922<br>(60.2865)</td><td>-53.0927**<br>(23.6493)</td><td>-56.3174**<br>(23.4842)</td></tr><tr><td>OECD dum<sub>j</sub> * FDI RI Agriculture</td><td>-4.7502<br>(6.4052)</td><td>15.4586<br>(15.4586)</td><td>-8.0206<br>(5.2854)</td><td>-8.1342<br>(5.1392)</td></tr><tr><td>OECD dum<sub>j</sub> * FDI RI Mining Quarrying</td><td>48.1582*<br>(29.0632)</td><td>-76.4974<br>(60.0520)</td><td>51.4118**<br>(23.5483)</td><td>54.7172**<br>(23.4172)</td></tr><tr><td>OECD dum<sub>j</sub></td><td>0.7574<br>(0.5399)</td><td>-0.8539<br>(0.6191)</td><td>0.9605**<br>(0.4485)</td><td>1.6248*<br>(0.9838)</td></tr><tr><td>Ln FDI<sub>ij,t-1</sub></td><td>0.1508**<br>(0.0674)</td><td>0.0772<br>(0.0771)</td><td>0.1953***<br>(0.0449)</td><td>0.0958**<br>(0.0478)</td></tr><tr><td>Ln distance<sub>ij,t-1</sub></td><td>-1.9904***<br>(0.2999)</td><td>-2.0189***<br>(0.3024)</td><td>-0.9990***<br>(0.1539)</td><td>-1.0245***<br>(0.1596)</td></tr><tr><td>Common border<sub>ij,t-1</sub></td><td>-0.3151<br>(0.2694)</td><td>-0.3267<br>(0.2687)</td><td>-0.3415**<br>(0.1601)</td><td>-0.3537**<br>(0.1618)</td></tr><tr><td>Common lang<sub>ij,t-1</sub></td><td>0.4399<br>(0.2704)</td><td>0.4564*<br>(0.2715)</td><td>0.2757*<br>(0.1485)</td><td>0.2597*<br>(0.1489)</td></tr><tr><td>Colonial links<sub>ij,t-1</sub></td><td>0.5229<br>(0.3518)</td><td>0.4702<br>(0.3523)</td><td>0.3969***<br>(0.1455)</td><td>0.3983***<br>(0.1458)</td></tr><tr><td>RTA<sub>ij,t-1</sub></td><td>-1.1363***<br>(0.3677)</td><td>-1.1015***<br>(0.3591)</td><td>0.4250***<br>(0.1649)</td><td>0.4031**<br>(0.1738)</td></tr><tr><td>BIT<sub>ij,t-1</sub></td><td>-0.6916***<br>(0.1816)</td><td>-0.7232***<br>(0.1836)</td><td>-0.3477*<br>(0.1896)</td><td>-0.3333*<br>(0.1924)</td></tr><tr><td>Ln GDP<sub>i,t-1</sub></td><td>0.7136***<br>(0.2589)</td><td>0.7984***<br>(0.2105)</td><td>0.2226***<br>(0.0311)</td><td>0.1268<br>(0.1059)</td></tr><tr><td>Ln GDP<sub>j,t-1</sub></td><td>1.9473***<br>(0.1782)</td><td>2.1159***<br>(0.1731)</td><td>2.4856***<br>(0.1535)</td><td>2.4634***<br>(0.1594)</td></tr><tr><td>Trade openness<sub>j,t-1</sub></td><td>1.1237***<br>(0.1727)</td><td>1.2692***<br>(0.1810)</td><td>1.4884***<br>(0.1156)</td><td>1.4489***<br>(0.1253)</td></tr><tr><td>Regulatory quality<sub>j,t-1</sub></td><td>0.1141<br>(0.0873)</td><td>0.1766*<br>(0.0966)</td><td>0.1310**<br>(0.0613)</td><td>0.1300**<br>(0.0631)</td></tr><tr><td>Ln productivity<sub>j,t-1</sub></td><td>0.4983**<br>(0.2014)</td><td>-0.6048<br>(0.5201)</td><td>0.4996***<br>(0.1597)</td><td>0.7315**<br>(0.3582)</td></tr><tr><td>Ln tax burden<sub>j,t-1</sub></td><td>-0.4218<br>(0.9737)</td><td>-1.1113<br>(1.0413)</td><td>-0.2210<br>(0.7134)</td><td>-0.2156<br>(0.7604)</td></tr><tr><td>HCD<sub>ij,t-1</sub></td><td>-6.0677***<br>(1.3539)</td><td>-5.9650***<br>(1.3248)</td><td>-0.3543<br>(1.5101)</td><td>0.0549<br>(1.5138)</td></tr><tr><td>Ln Labor freedom<sub>j,t-1</sub></td><td>2.0241***<br>(0.7318)</td><td>2.2859***<br>(0.7600)</td><td>2.4499***<br>(0.5708)</td><td>2.5550***<br>(0.5907)</td></tr><tr><td>Time - FE</td><td>No</td><td>Yes</td><td>No</td><td>Yes</td></tr><tr><td>Country - FE</td><td>No</td><td>No</td><td>Yes</td><td>Yes</td></tr><tr><td>R<sup>2</sup></td><td>0.5211</td><td>0.5383</td><td>0.7967</td><td>0.8052</td></tr><tr><td>Observations</td><td>15213</td><td>15213</td><td>15213</td><td>15213</td></tr></tbody></table>

Notes: The dependent variable is bilateral FDI stocks. Standard errors are reported respectively at the 10% in parentheses and clustered by country- pair level. *, **, *** denote significance, 5% and 1% levels
<table><caption>Table 12: Gravity Estimation Results of Impacts of Restrictive Measures on FDI Stocks: OECD vs. All emerging countries including Africa</caption><thead><tr><th rowspan="2">Model</th><th colspan="4">FDI RI global</th><th colspan="4">Sectoral FDI RI</th></tr><tr><th>(1)</th><th>(2)</th><th>(3)</th><th>(4)</th><th>(5)</th><th>(6)</th><th>(7)</th><th>(8)</th></tr></thead><tbody><tr><td>FDI RI Global<sub>j,t-1</sub></td><td>-1.1256<br>(1.2473)</td><td>-0.9743<br>(1.3225)</td><td>-2.9996***<br>(0.8606)</td><td>-2.9961***<br>(0.8572)</td><td></td><td></td><td></td><td></td></tr><tr><td>FDI RI Primary<sub>j,t-1</sub></td><td></td><td></td><td></td><td></td><td>3.3042*<br>(1.8542)</td><td>2.1786<br>(2.1177)</td><td>0.0024<br>(1.6079)</td><td>1.1242<br>(1.5991)</td></tr><tr><td>FDI RI Secondary<sub>j,t-1</sub></td><td></td><td></td><td></td><td></td><td>4.5390*<br>(2.7509)</td><td>5.2919*<br>(2.8590)</td><td>3.5005**<br>(1.5584)</td><td>3.1564*<br>(1.6280)</td></tr><tr><td>FDI RI Tertiary<sub>j,t-1</sub></td><td></td><td></td><td></td><td></td><td>-6.7533**<br>(2.8166)</td><td>-5.8418**<br>(2.9723)</td><td>-4.2562**<br>(1.7295)</td><td>-5.2182***<br>(1.8172)</td></tr><tr><td>OECD dum<sub>j</sub> * FDI RI Global</td><td>-0.3845<br>(2.6583)</td><td>-0.7965<br>(2.6414)</td><td>1.2851<br>(1.6949)</td><td>1.7642<br>(1.8593)</td><td></td><td></td><td></td><td></td></tr><tr><td>OECD dum<sub>j</sub> * FDI RI Primary</td><td></td><td></td><td></td><td></td><td>-1.1610<br>(2.5509)</td><td>0.1110<br>(2.7796)</td><td>1.6178<br>(1.7773)</td><td>0.4286<br>(1.8011)</td></tr><tr><td>OECD dum<sub>j</sub> * FDI RI Secondary</td><td></td><td></td><td></td><td></td><td>-4.3517<br>(3.4762)</td><td>-4.7945<br>(3.4757)</td><td>-3.5131<br>(2.5677)</td><td>-2.8719<br>(2.5993)</td></tr><tr><td>OECD dum<sub>j</sub> * FDI RI Tertiary</td><td></td><td></td><td></td><td></td><td>2.9679<br>(3.6022)</td><td>1.3991<br>(3.7607)</td><td>0.7142<br>(2.4712)</td><td>1.8804<br>(2.7528)</td></tr><tr><td>OECD dum<sub>j</sub></td><td>-0.2421<br>(0.4680)</td><td>-0.4509<br>(0.4486)</td><td>0.2990<br>(0.3004)</td><td>1.7348***<br>(0.5517)</td><td>-0.3226<br>(0.4281)</td><td>-0.5497<br>(0.4119)</td><td>0.1778<br>(0.3083)</td><td>1.4397***<br>(0.4985)</td></tr><tr><td>Ln FDI<sub>ij,t-1</sub></td><td>0.1954***<br>(0.0636)</td><td>0.1366*<br>(0.0730)</td><td>0.2163***<br>(0.0447)</td><td>0.1035**<br>(0.0481)</td><td>0.1868***<br>(0.0648)</td><td>0.1236*<br>(0.0748)</td><td>0.2113***<br>(0.0428)</td><td>0.1020**<br>(0.0456)</td></tr><tr><td>Ln distance<sub>ij,t-1</sub></td><td>-1.9771***<br>(0.2636)</td><td>-1.9741***<br>(0.2680)</td><td>-1.1012***<br>(0.1328)</td><td>-1.1291***<br>(0.1368)</td><td>-2.0136***<br>(0.2704)</td><td>-2.0097***<br>(0.2753)</td><td>-1.1251***<br>(0.1438)</td><td>-1.1560***<br>(0.1498)</td></tr><tr><td>Common border<sub>ij,t-1</sub></td><td>-0.4961*<br>(0.2731)</td><td>-0.4713*<br>(0.2728)</td><td>-0.4307***<br>(0.1490)</td><td>-0.4493***<br>(0.1505)</td><td>-0.4683*<br>(0.2808)</td><td>-0.4430<br>(0.2811)</td><td>-0.3969***<br>(0.1441)</td><td>-0.4154***<br>(0.1450)</td></tr><tr><td>Common lang<sub>ij,t-1</sub></td><td>0.4742*<br>(0.2649)</td><td>0.4856*<br>(0.2653)</td><td>0.3260**<br>(0.1477)</td><td>0.3006**<br>(0.1486)</td><td>0.4747*<br>(0.2662)</td><td>0.4869*<br>(0.2662)</td><td>0.3371**<br>(0.1462)</td><td>0.3126**<br>(0.1474)</td></tr><tr><td>Colonial links<sub>ij,t-1</sub></td><td>0.6043*<br>(0.3346)</td><td>0.5744*<br>(0.3379)</td><td>0.3842**<br>(0.1545)</td><td>0.3895**<br>(0.1563)</td><td>0.5380<br>(0.3441)</td><td>0.4997<br>(0.3476)</td><td>0.3246**<br>(0.1485)</td><td>0.3320**<br>(0.1524)</td></tr><tr><td>RTA<sub>ij,t-1</sub></td><td>-0.6711***<br>(0.2485)</td><td>-0.6902***<br>(0.2498)</td><td>0.3709***<br>(0.1392)</td><td>0.3399**<br>(0.1445)</td><td>-0.7202***<br>(0.2586)</td><td>-0.7397***<br>(0.2602)</td><td>0.3622**<br>(0.1519)</td><td>0.3256**<br>(0.1579)</td></tr><tr><td>BIT<sub>ij,t-1</sub></td><td>-0.7235***<br>(0.1672)</td><td>-0.7344***<br>(0.1657)</td><td>-0.3811**<br>(0.1716)</td><td>-0.3403*<br>(0.1762)</td><td>-0.7611***<br>(0.1659)</td><td>-0.7801***<br>(0.1645)</td><td>-0.5056***<br>(0.1816)</td><td>-0.4657**<br>(0.1883)</td></tr><tr><td>Ln GDP<sub>i,t-1</sub></td><td>0.8493***<br>(0.2575)</td><td>0.8505***<br>(0.2566)</td><td>0.2065***<br>(0.0305)</td><td>-0.0635<br>(0.0680)</td><td>0.8338***<br>(0.2589)</td><td>0.8358***<br>(0.2569)</td><td>0.2093***<br>(0.0306)</td><td>-0.0390<br>(0.0669)</td></tr><tr><td>Ln GDP<sub>j,t-1</sub></td><td>1.9525***<br>(0.1788)</td><td>1.9383***<br>(0.1762)</td><td>2.4245***<br>(0.1309)</td><td>2.4079***<br>(0.1273)</td><td>1.8073***<br>(0.1721)</td><td>1.7914***<br>(0.1691)</td><td>2.2793***<br>(0.1268)</td><td>2.2682***<br>(0.1273)</td></tr><tr><td>Trade openness<sub>j,t-1</sub></td><td>1.1521***<br>(0.1775)</td><td>1.1366***<br>(0.1772)</td><td>1.4490***<br>(0.1164)</td><td>1.3982***<br>(0.1166)</td><td>1.1033***<br>(0.1766)</td><td>1.0873***<br>(0.1759)</td><td>1.3928***<br>(0.1119)</td><td>1.3415***<br>(0.1135)</td></tr><tr><td>Regulatory quality<sub>j,t-1</sub></td><td>0.2005**<br>(0.0867)</td><td>0.1978**<br>(0.0908)</td><td>0.1790***<br>(0.0626)</td><td>0.1621**<br>(0.0645)</td><td>0.1771**<br>(0.0814)</td><td>0.1773**<br>(0.0855)</td><td>0.1664***<br>(0.0601)</td><td>0.1525**<br>(0.0617)</td></tr><tr><td>Ln productivity<sub>j,t-1</sub></td><td>0.0368<br>(0.1197)</td><td>-0.0820<br>(0.1348)</td><td>0.2615***<br>(0.0763)</td><td>0.7824***<br>(0.1792)</td><td>0.1217<br>(0.1154)</td><td>-0.0155<br>(0.1401)</td><td>0.2806***<br>(0.0752)</td><td>0.7370***<br>(0.1621)</td></tr><tr><td>Ln tax burden<sub>j,t-1</sub></td><td>-0.9246<br>(0.8583)</td><td>-1.0305<br>(0.8586)</td><td>-0.2375<br>(0.6579)</td><td>-0.1279<br>(0.6719)</td><td>-0.3930<br>(0.8710)</td><td>-0.4514<br>(0.8866)</td><td>0.0872<br>(0.6451)</td><td>0.2146<br>(0.6649)</td></tr><tr><td>HCD<sub>ij,t-1</sub></td><td>-7.1570***<br>(1.0189)</td><td>-7.3917***<br>(1.0036)</td><td>-0.8946<br>(1.1099)</td><td>-0.3179<br>(1.1202)</td><td>-7.2453***<br>(1.0396)</td><td>-7.4677***<br>(1.0243)</td><td>-1.0193<br>(1.1249)</td><td>-0.5228<br>(1.1260)</td></tr><tr><td>Ln Labor freedom<sub>j,t-1</sub></td><td>1.8006***<br>(0.6231)</td><td>1.9630***<br>(0.6433)</td><td>2.3156***<br>(0.5164)</td><td>2.3632***<br>(0.5304)</td><td>1.8708***<br>(0.6430)</td><td>2.0389***<br>(0.6668)</td><td>2.3132***<br>(0.5148)</td><td>2.3505***<br>(0.5338)</td></tr><tr><td>Time - FE</td><td>No</td><td>Yes</td><td>No</td><td>Yes</td><td>No</td><td>Yes</td><td>No</td><td>Yes</td></tr><tr><td>Country - FE</td><td>No</td><td>No</td><td>Yes</td><td>Yes</td><td>No</td><td>No</td><td>Yes</td><td>Yes</td></tr><tr><td>R<sup>2</sup></td><td>0.5190</td><td>0.5282</td><td>0.7932</td><td>0.8039</td><td>0.5228</td><td>0.5324</td><td>0.7956</td><td>0.8061</td></tr><tr><td>Observations</td><td>21566</td><td>21566</td><td>21566</td><td>21566</td><td>21566</td><td>21566</td><td>21566</td><td>21566</td></tr></tbody></table>

Notes: The dependent variable is bilateral FDI stocks. Columns (1), (2), (3), (4) represent the results of the impact of global FDI regulatory restrictiveness index on cross-border investment and (5), (6), (7), (8) the results of sector-specific regulatory restrictiveness of FDI. Standard errors are reported in parentheses and clustered by country-pair level. *, **, *** denote significance at the 10%, 5% and 1% levels.
<table><caption>Table .13: OECD, Emerging and Africa Countries</caption><thead><tr><th>OECD</th><th>Emerging</th><th>Africa</th></tr></thead><tbody><tr><td>Austria</td><td>Argentina</td><td>Egypt</td></tr><tr><td>Belgium</td><td>Brazil</td><td>Morocco</td></tr><tr><td>Canada</td><td>China</td><td>South Africa</td></tr><tr><td>Chile</td><td>Colombia</td><td>Tunisia</td></tr><tr><td>Czech Republic</td><td>India</td><td></td></tr><tr><td>Denmark</td><td>Indonesia</td><td></td></tr><tr><td>Estonia</td><td>Malaysia</td><td></td></tr><tr><td>Finland</td><td>Russia</td><td></td></tr><tr><td>France</td><td>South Africa</td><td></td></tr><tr><td>Germany</td><td>Thailand</td><td></td></tr><tr><td>Greece</td><td></td><td></td></tr><tr><td>Hungary</td><td></td><td></td></tr><tr><td>Iceland</td><td></td><td></td></tr><tr><td>Ireland</td><td></td><td></td></tr><tr><td>Israel</td><td></td><td></td></tr><tr><td>Italy</td><td></td><td></td></tr><tr><td>Japan</td><td></td><td></td></tr><tr><td>Korea</td><td></td><td></td></tr><tr><td>Latvia</td><td></td><td></td></tr><tr><td>Lithuania</td><td></td><td></td></tr><tr><td>Luxembourg</td><td></td><td></td></tr><tr><td>Mexico</td><td></td><td></td></tr><tr><td>Netherlands</td><td></td><td></td></tr><tr><td>New Zealand</td><td></td><td></td></tr><tr><td>Norway</td><td></td><td></td></tr><tr><td>Poland</td><td></td><td></td></tr><tr><td>Portugal</td><td></td><td></td></tr><tr><td>Slovak Republic</td><td></td><td></td></tr><tr><td>Slovenia</td><td></td><td></td></tr><tr><td>Spain</td><td></td><td></td></tr><tr><td>Sweden</td><td></td><td></td></tr><tr><td>Switzerland</td><td></td><td></td></tr><tr><td>Turkey</td><td></td><td></td></tr><tr><td>United Kingdom</td><td></td><td></td></tr><tr><td>United States</td><td></td><td></td></tr></tbody></table>
A. APPENDIX

<table><caption>Table A.1: Variable Description and Sources</caption><thead><tr><th>Variables</th><th>Description</th><th>Source</th></tr></thead><tbody><tr><td>FDI<sub>ij,t</sub></td><td>Aggregate bilateral greenfield investments</td><td>OECD.stat</td></tr><tr><td>RTA<sub>ij,t</sub></td><td>Is a dummy that indicates whether both countries have a trade agreement in force</td><td>WTO (RTA-IS)</td></tr><tr><td>BIT<sub>ij,t</sub></td><td>Is a dummy that indicates whether both countries have an investment agreement in force</td><td>UNCTADinvestment</td></tr><tr><td>border<sub>ij</sub></td><td>Takes the value 1 when countries share a common border, and 0 otherwise</td><td>CEPII</td></tr><tr><td>lang<sub>ij</sub></td><td>Takes the value 1 when countries share a common language</td><td>CEPII</td></tr><tr><td>colonial links<sub>ij</sub></td><td>Takes the value 1 when two countries share colonial links and 0 otherwise</td><td>CEPII</td></tr><tr><td>Distance<sub>ij</sub></td><td>Distance in kilometers between country capitals</td><td>CEPII</td></tr><tr><td>FDI RI Global<sub>j,t</sub></td><td>Overall FDI Regulatory Restrictiveness Index of OECD captures the level of restrictiveness in FDI on all sectors in the host country</td><td>OECD.stat</td></tr><tr><td>FDI RI Primary<sub>j,t</sub></td><td>FDI Regulatory Restrictiveness Index of OECD captures the level of restrictiveness in FDI on manufacturing sector in the host country</td><td>OECD.stat</td></tr><tr><td>FDI RI Secondary<sub>j,t</sub></td><td>FDI Regulatory Restrictiveness Index of OECD captures the level of restrictiveness in FDI on secondary sector in the host country</td><td>OECD.stat</td></tr><tr><td>FDI RI Tertiary<sub>j,t</sub></td><td>FDI Regulatory Restrictiveness Index of OECD captures the level of restrictiveness in FDI on tertiary sector in the host country</td><td>OECD.stat</td></tr><tr><td>GDP<sub>i,t</sub></td><td>Home country GDP (constant 2010 US)</td><td>World Bank database</td></tr><tr><td>GDP<sub>j,t</sub></td><td>Host country GDP (constant 2010 US)</td><td>World Bank database</td></tr><tr><td>Trade openness<sub>j,t</sub></td><td>Sum of destination country's imports and exports normalized by GDP</td><td>World Bank database</td></tr><tr><td>Regul quality<sub>j,t</sub></td><td>Index that captures the ability of the government of the host country to formulate and implement sound policies and regulations</td><td>World Governance indicators</td></tr><tr><td>Productivity<sub>j,t</sub></td><td>Labour productivity measured by GDP per hour worked (U.S dollars)</td><td>OECD.stat</td></tr><tr><td>Tax burden<sub>j,t</sub></td><td>Measures the tax burden imposed by the government of host country</td><td>Heritage Foundation</td></tr><tr><td>Labour freedom<sub>j,t</sub></td><td>Index that measures the legal and regulatory framework of a host country's labour market</td><td>Heritage Foundation</td></tr><tr><td>Education<sub>j,t</sub></td><td>Index that measures the average years of schooling in host country</td><td>Penn World database</td></tr></tbody></table>
<table><caption>Table A.2: Descriptive Statistics</caption><thead><tr><th>Variables</th><th>obs.</th><th>Mean</th><th>Std. Dev.</th><th>Min</th><th>Max</th></tr></thead><tbody><tr><td><strong>Bilateral FDI</strong></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>FDI<sub>ij,t</sub></td><td>21,960</td><td>7345.433</td><td>44071.73</td><td>0</td><td>1056271</td></tr><tr><td><strong>Traditional variables of the gravity model</strong></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>BIT<sub>ij,t</sub></td><td>21,960</td><td>0.5297814</td><td>0.4991236</td><td>0</td><td>1</td></tr><tr><td>RTA<sub>ij,t</sub></td><td>21,960</td><td>0.6142077</td><td>0.486793</td><td>0</td><td>1</td></tr><tr><td>border<sub>ij</sub></td><td>21,960</td><td>0.0441712</td><td>0.20548</td><td>0</td><td>1</td></tr><tr><td>lang<sub>ij</sub></td><td>21,960</td><td>0.0619308</td><td>0.2410353</td><td>0</td><td>1</td></tr><tr><td>colonial links<sub>ij</sub></td><td>21,960</td><td>0.0350638</td><td>0.1839452</td><td>0</td><td>1</td></tr><tr><td>Ln distance<sub>ij</sub></td><td>21,960</td><td>3.613527</td><td>0.4664477</td><td>1.775372</td><td>4.29195</td></tr><tr><td>Ln GDP<sub>j,t</sub></td><td>21,960</td><td>11.65486</td><td>0.6676412</td><td>10.1362</td><td>13.26245</td></tr><tr><td>Ln GDP<sub>i,t</sub></td><td>21,960</td><td>10.85451</td><td>2.929926</td><td>1.011451</td><td>13.26245</td></tr><tr><td><strong>Host country specific characteristics</strong></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Regul quality<sub>j,t</sub></td><td>21,960</td><td>0.9679318</td><td>0.739656</td><td>-1.074257</td><td>2.088636</td></tr><tr><td><strong>FDI determinants in Host country</strong></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Productivity<sub>j,t</sub></td><td>21,959</td><td>7476.289</td><td>15497.5</td><td>19.43301</td><td>59390.48</td></tr><tr><td>Tax burden<sub>j,t</sub></td><td>21,960</td><td>68.28214</td><td>12.28882</td><td>35.9</td><td>93.6</td></tr><tr><td>Labour freedom<sub>j,t</sub></td><td>21,960</td><td>62.14343</td><td>14.75172</td><td>21.7</td><td>98.5</td></tr><tr><td>Education<sub>j,t</sub></td><td>21,864</td><td>3.165414</td><td>0.4624206</td><td>1.750288</td><td>3.89154</td></tr><tr><td>Education<sub>i,t</sub></td><td>21,760</td><td>3.121759</td><td>0.5139138</td><td>1.750288</td><td>3.89154</td></tr><tr><td>Trade openness<sub>j,t</sub></td><td>21,864</td><td>0.9518639</td><td>0.6097027</td><td>0.2248623</td><td>4.08362</td></tr><tr><td><strong>FDI Regulatory Restrictiveness Index</strong></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>FDI RI Global<sub>j,t</sub></td><td>21,960</td><td>0.089699</td><td>0.0878699</td><td>0.004</td><td>0.435</td></tr><tr><td>FDI RI Primary<sub>j,t</sub></td><td>21,960</td><td>0.1192143</td><td>0.1168962</td><td>0</td><td>0.495</td></tr><tr><td>FDI RI Secondary<sub>j,t</sub></td><td>21,960</td><td>0.0403809</td><td>0.0612678</td><td>0</td><td>0.295</td></tr><tr><td>FDI RI Tertiary<sub>j,t</sub></td><td>21,960</td><td>0.1095849</td><td>0.1073558</td><td>0.007</td><td>0.506</td></tr></tbody></table>
<table><caption>Table A.3: Cross-Correlation Table</caption><thead><tr><th>Variables</th><th>FDI</th><th>BIT</th><th>RTA</th><th>border</th><th>lang</th><th>colonial links</th><th>Ln distance</th><th>Productivity</th><th>Tax burden</th><th>Labour freedom</th><th>Regulatory quality</th><th>Ln GDP<sub>i</sub></th><th>Ln GDP<sub>i</sub></th><th>FDI RI Global</th><th>FDI RI Primary</th><th>FDI RI Secondary</th><th>FDI RI Tertiary</th><th>Educa tion<sub>i</sub></th><th>Educa tion<sub>j</sub></th><th>Trade openness</th></tr></thead><tbody><tr><td>FDI</td><td>1.000</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>BIT</td><td>-0.039</td><td>1.000</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>RTA</td><td>-0.015</td><td>0.290</td><td>1.000</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>border</td><td>0.110</td><td>0.096</td><td>0.105</td><td>1.000</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>lang</td><td>0.150</td><td>-0.097</td><td>-0.008</td><td>0.202</td><td>1.000</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>colonial links</td><td>0.105</td><td>0.006</td><td>-0.016</td><td>0.224</td><td>0.269</td><td>1.000</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Ln distance</td><td>-0.105</td><td>-0.428</td><td>-0.527</td><td>-0.393</td><td>-0.048</td><td>-0.088</td><td>1.000</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Productivity</td><td>-0.052</td><td>-0.059</td><td>-0.250</td><td>-0.044</td><td>-0.002</td><td>0.017</td><td>0.199</td><td>1.000</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Tax burden</td><td>-0.063</td><td>-0.070</td><td>-0.105</td><td>-0.056</td><td>-0.041</td><td>-0.015</td><td>0.142</td><td>0.320</td><td>1.000</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Labor freedom</td><td>0.068</td><td>-0.157</td><td>-0.159</td><td>-0.032</td><td>0.077</td><td>0.004</td><td>0.144</td><td>-0.130</td><td>0.017</td><td>1.000</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Regulatory quality</td><td>0.069</td><td>0.018</td><td>0.162</td><td>0.051</td><td>0.034</td><td>-0.004</td><td>-0.137</td><td>-0.705</td><td>-0.339</td><td>0.296</td><td>1.000</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Ln GDP<sub>i</sub></td><td>0.124</td><td>-0.056</td><td>-0.237</td><td>0.019</td><td>0.069</td><td>0.053</td><td>0.173</td><td>0.047</td><td>-0.244</td><td>0.176</td><td>-0.044</td><td>1.000</td><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Ln GDP<sub>i</sub></td><td>0.002</td><td>-0.027</td><td>-0.108</td><td>-0.009</td><td>0.020</td><td>0.013</td><td>0.065</td><td>0.127</td><td>0.050</td><td>-0.034</td><td>-0.122</td><td>-0.015</td><td>1.000</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>FDI RI Overall</td><td>-0.042</td><td>-0.166</td><td>-0.316</td><td>-0.076</td><td>0.018</td><td>-0.025</td><td>0.311</td><td>0.390</td><td>0.272</td><td>0.136</td><td>-0.391</td><td>0.227</td><td>0.073</td><td>1.000</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>FDI RI Primary</td><td>-0.005</td><td>-0.146</td><td>-0.255</td><td>-0.077</td><td>0.021</td><td>-0.011</td><td>0.307</td><td>0.264</td><td>0.141</td><td>0.122</td><td>-0.288</td><td>0.277</td><td>0.054</td><td>0.886</td><td>1.000</td><td></td><td></td><td></td><td></td></tr><tr><td>FDI RI Secondary</td><td>-0.040</td><td>-0.151</td><td>-0.241</td><td>-0.051</td><td>0.026</td><td>-0.028</td><td>0.254</td><td>0.192</td><td>0.160</td><td>0.226</td><td>-0.180</td><td>0.070</td><td>0.036</td><td>0.841</td><td>0.694</td><td>1.000</td><td></td><td></td><td></td></tr><tr><td>FDI RI Tertiary</td><td>-0.052</td><td>-0.154</td><td>-0.332</td><td>-0.076</td><td>0.013</td><td>-0.025</td><td>0.298</td><td>0.469</td><td>0.341</td><td>0.100</td><td>-0.467</td><td>0.237</td><td>0.083</td><td>0.970</td><td>0.801</td><td>0.743</td><td>1.000</td><td></td><td></td></tr><tr><td>Education<sub>i</sub></td><td>0.112</td><td>0.024</td><td>0.128</td><td>0.066</td><td>0.021</td><td>-0.003</td><td>-0.180</td><td>0.181</td><td>0.066</td><td>-0.035</td><td>-0.155</td><td>0.014</td><td>-0.025</td><td>0.102</td><td>0.081</td><td>0.055</td><td>0.117</td><td>1.000</td><td></td></tr><tr><td>Education<sub>j</sub></td><td>0.082</td><td>0.035</td><td>0.045</td><td>0.082</td><td>-0.014</td><td>0.012</td><td>-0.147</td><td>-0.463</td><td>-0.223</td><td>0.354</td><td>0.665</td><td>0.028</td><td>-0.132</td><td>-0.326</td><td>-0.302</td><td>-0.119</td><td>-0.375</td><td>-0.127</td><td>1.000</td></tr><tr><td>Trade openness</td><td>0.049</td><td>0.170</td><td>0.196</td><td>0.044</td><td>0.011</td><td>-0.041</td><td>-0.270</td><td>-0.239</td><td>0.043</td><td>-0.060</td><td>0.289</td><td>-0.529</td><td>-0.061</td><td>-0.303</td><td>-0.290</td><td>-0.232</td><td>-0.294</td><td>-0.050</td><td>0.232</td><td>1.000</td></tr></tbody></table>
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Ion LAPTEACRU and Ernest MIGUELEZ are the scientific coordinators of the Bordeaux Economics Working Papers. The layout and distribution are provided by Cyril MESMER and Julie VISSAGUET.