The impact of economic freedom on foreign direct investment in selected countries with a dynamic panel approach

Investment of the main sources of growth and economic development. Therefore, the investment determinants is one of the most important fields of economists staduies. The aim of this paper is to examine the impact of economic freedom to attract foreign direct investment. For this purpose, we used a sample of selected countries in the period 1985-2014 with dynamic panel data approach and generalized method of moments (GMM). For the accurate measurement of both the Heritage Foundation Index of Economic Freedom (Index combines 10 indicators of economic freedom) and Fraser Foundation (index composed of 5 groups of indicators of economic freedom) is used. The results of desired models, show a significant and positive impact of economic freedom (with both define) In contrast, less government presence in the economy on attracting FDI. In this study also examines the effects of other variables effect on by FDI. The results show that globalization human capital have a significant and positive impact on foreign direct investment in the sample and ultimately inflation have a changing negative effect and significant on FDI.