Freedom of Speech: The Link Between Killed Journalists and Foreign Direct Investment

Abstract

The study “The colonial origins of comparative development: an empirical assessment” by Acemoglu et al (2000), is one of the main studies included in the New Institutional Economics (NIE). The aforementioned article begins with the following question: “What are the fundamental causes of the large differences in income per capita across countries?” (ACEMOGLU et al. 2000). By taking the article of Acemoglu et al (2000) as an inspiration, this study aims to verify a relationship also between the institutional environment and economic performance, but in this case verifying the relationship of simultaneity between the number of journalists killed, influencing property rights and these determining the flow of foreign direct investments (FDI). Based on this relationship, we make an attempt to answer the following research question: What are the fundamental causes of the differences in the receipt of foreign direct investments among developing countries? Through the theoretical framework of the NIE and the political science and by conducting a series of quantitative analyzes, following the simultaneous equations model with data from 75 developing countries over ten years (2000-2010), we found that the number of journalists killed is an appropriate variable to instrumentalize the FDI. Thus, it is concluded that countries that best ensure the right to life and freedom of the press better safeguard property rights in their territories and consequently attract higher volumes of foreign direct investment.