Foreign Direct Investment Projects Research Articles

Assessment of the Current Situation and Solutions to Attract Australian FDI Capital to Vietnam in the Context of International Integration

Foreign Direct Investment (FDI) has played a pivotal role in Vietnam’s economic transformation, significantly contributing to industrialization, job creation, and export growth. Since the introduction of the Law on Foreign Investment in 1987 and Vietnam’s accession to the World Trade Organization (WTO) in 2007, the country has emerged as a leading destination for foreign investors in Southeast Asia. Key sectors attracting FDI include manufacturing, real estate, and services, which have driven economic development and facilitated Vietnam’s integration into the global economy. Despite these successes, challenges remain that hinder FDI’s full potential, including administrative inefficiencies, complex regulations, corruption, and inadequate infrastructure. The shortage of highly skilled labor, especially in technology-driven fields, also limits the country's ability to attract higher-value FDI projects. Moreover, there are regional disparities in FDI distribution, with major urban centers like Ho Chi Minh City and Hanoi receiving most investments, while rural areas are often overlooked. The impact of new-generation Free Trade Agreements (FTAs), such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the Regional Comprehensive Economic Partnership (RCEP), is also examined. These agreements enhance market access, legal protections for investors, and reduce trade barriers, making Vietnam increasingly attractive for high-tech and service industries. This paper assesses the current FDI landscape in Vietnam, identifying opportunities and challenges for foreign investors. Recommendations include simplifying business procedures, implementing anti-corruption measures, improving infrastructure, and enhancing workforce training to address skills gaps. By adopting these reforms, Vietnam can attract higher-quality investments, strengthen ties with global supply chains, and foster sustainable economic growth. Additionally, the research emphasizes the importance of building stronger partnerships between FDI enterprises and local firms to ensure the widespread distribution of investment benefits across the economy. With a more favorable investment climate, Vietnam can reinforce its position as a premier destination for global investors and enhance its role in the international market.

Performance Analysis of Vietnamese Provinces’ FDI Attractiveness: An Application of DEA and Malmquist Indexes

Vietnam has emerged as a highly promising destination for foreign direct investment (FDI) projects, experiencing a commendable and consistent influx of FDI in recent years. However, this surge is not uniformly distributed across provinces. This study applies the data envelopment analysis (DEA) and Malmquist index measurement to evaluate FDI attractiveness of provinces in Vietnam from 2012 to 2020. Based on DEA, the analysis takes the provinces’ five indicators (Labor Force, Gross Regional Domestic Product, Provincial Competitiveness Index, FDI by capital, and FDI by cases) into account in order to identify provinces ripe for targeted improvement as well as those that can serve as exemplars for others. Next, Malmquist indexes are derived from DEA assessment to observe the evolution of each province during 2012 to 2020, and then decomposed to uncover the cause of performance change. We find that only four provinces are able to achieve perfect efficiency in attracting FDI, including three provinces from South East region: Vung Tau, Binh Duong, Ho Chi Minh, and Ha Tinh. Nevertheless, nearly 80% of the provinces improve their performance. The methodology and findings in this paper can provide significant insights for policymakers to devise mechanisms to attract FDI in their locality.

Jobs first, environment second: the conditional effect of pollution on perceptions of Foreign Direct Investment

The growing literature on public opinion toward foreign direct investment (FDI) focuses primarily on the FDI-related job prospects of individuals. However, different types of FDI have varying economic and environmental impacts; we argue that individuals consider the trade-offs between these effects when forming attitudes about FDI. Utilizing a province-level dataset of recent FDI projects (categorized by their level of pollution and job creation) matched with public opinion data in seven Latin American countries, we find that exposure to investment that creates larger numbers of jobs improves attitudes toward FDI, regardless of environmental impact. However, environmental impact is a significant component of how some individuals form perspectives about FDI: respondents that prioritize the environment have more positive attitudes toward FDI when they are exposed to a higher share of FDI with relatively less environmental impact. Among all respondents, exposure to more economically beneficial FDI has a stronger positive impact when a higher percentage of the FDI is in lower-polluting industries.

The geography of acquisitions and greenfield investments: Firm heterogeneity and regional institutional conditions

AbstractThis paper investigates how institutional conditions at national and regional levels shape the decisions of Multinational Enterprises (MNEs) to invest abroad by means of either acquisitions or greenfield investments. The empirical analysis covers all foreign direct investment (FDI) projects in the European Union by the largest MNEs in the world to study alternative choices by the same firm and account for firm‐level characteristics in investment decisions. The empirical results show that—other things being equal—regions with stronger investment eco‐systems are more likely to attract acquisitions, while greenfield investments are more likely in regions with comparatively weaker systemic conditions. Howerver, the regional quality of institutions makes a fundamental difference to the nature of the investment projects attracted by regions: those with high quality of government can attract greenfield investments undertaken by the most productive MNEs. By improving their quality of government, local, and regional policy makers can attract higher quality greenfield investment projects to their constituencies, potentially breaking the vicious circle between low productivity areas and low productivity FDI.

Follow the Giver: Is Chinese MNEs’ Investment in Africa Linked to Official Aid?

AbstractDoes Chinese aid to African countries trigger Chinese foreign direct investment? Bridging the literature on the impact of foreign aid on foreign direct investment (FDI) and that on state ownership, we consider FDI by China's state-owned enterprises (SOEs) compared with that of its privately owned enterprises (POEs) and find FDI by the former is more likely to follow Chinese governmental aid to Africa. Borrowing from institutional theory, we posit that FDI by SOEs follows political imperatives while FDI by POEs pursues market motives. Using data from multiple sources on 3,760 Chinese FDI projects in Africa between 2001 and 2015, we find a correlation between SOE FDI and government aid than that of POEs; that aid has a greater impact on the probability of FDI when the policies of the host country and those of China are in sync, especially in the case of SOEs; and that in low-investment-risk countries the link between aid and investment is weakened, especially in the case of POEs. The results are robust and consistent across different measures and analyses. We contribute to the literature on the relationship between aid and FDI, as well as to that on varieties of capitalism.

Impediments in attracting greenfield investment: does a stable absorption rate of the European cohesion policy make a difference?

ABSTRACT This paper seeks to investigate how the absorption rate of the European Cohesion Policy (ECP) funds and its dynamics are related to the creation of greenfield foreign direct investment (FDI) projects in the European Union (EU). A dynamic panel estimation based on 28 recipient countries in 2007–2016 reveals that a high ECP funds absorption rate alone does not ensure the creation of greenfield FDI. However, stable absorption (i.e. low dynamics in the ECP funds absorption rate) seems to promote greenfield investment. The large year-to-year changes in the ECP funds absorption rate appear to indicate a non-stable business environment that may hamper new investment, calling for corrective mechanisms to prevent the inefficient rapid withdrawal of funds after the eligibility period.

FDI, Foreign Debt, and Economic Growth: The South Asian Perspective (1980-2020)

The present study examines the intricate relationship between foreign direct investment (FDI), foreign debt, and economic growth over the period of 1980 to 2020 in the following countries: India, Pakistan, Sri Lanka, Bangladesh, Nepal, Maldives, and Bhutan. The analysis utilizes data obtained from the World Bank, with productive projects, improved technology and expertise, technological transfer, foreign direct investment (FDI), export, import, and productive projects serving as independent variables. GDP growth is considered as the dependent variable. The model is subjected to rigorous testing procedures, which include the Fisher-Type ADF (for panel unit root), co-integration tests, histogram-based normality assessment, White test for heteroscedasticity, VIF (variance inflation factor) test for multicollinearity, and F-test for parameter significance. These procedures are implemented to ensure the model's robustness. Subsequent analysis is guided by the Hausman test's preference for the Fixed Effects (FE) model over the Random Effects (RE) model. It is worth noting that in both the FE and RE models, a negative correlation is observed between foreign debt and economic growth. The foreign direct investment (FDI) growth rate is inversely proportional to the growth rate of economic output (0.025 percent) and foreign debt (0.117 percent), according to the FE model. The interdependence of foreign direct investment (FDI) and foreign debt underscores the criticality for developing countries to effectively manage their foreign debt while facilitating FDI inflow. The research emphasizes that policy frameworks in these nations must reduce foreign debt in order to create an environment that is favorable for greater foreign direct investment.

FDI, Foreign Debt, and Economic Growth: The South Asian Perspective (1980-2020)

The present study examines the intricate relationship between foreign direct investment (FDI), foreign debt, and economic growth over the period of 1980 to 2020 in the following countries: India, Pakistan, Sri Lanka, Bangladesh, Nepal, Maldives, and Bhutan. The analysis utilizes data obtained from the World Bank, with productive projects, improved technology and expertise, technological transfer, foreign direct investment (FDI), export, import, and productive projects serving as independent variables. GDP growth is considered as the dependent variable. The model is subjected to rigorous testing procedures, which include the Fisher-Type ADF (for panel unit root), co-integration tests, histogram-based normality assessment, White test for heteroscedasticity, VIF (variance inflation factor) test for multicollinearity, and F-test for parameter significance. These procedures are implemented to ensure the model's robustness. Subsequent analysis is guided by the Hausman test's preference for the Fixed Effects (FE) model over the Random Effects (RE) model. It is worth noting that in both the FE and RE models, a negative correlation is observed between foreign debt and economic growth. The foreign direct investment (FDI) growth rate is inversely proportional to the growth rate of economic output (0.025 percent) and foreign debt (0.117 percent), according to the FE model. The interdependence of foreign direct investment (FDI) and foreign debt underscores the criticality for developing countries to effectively manage their foreign debt while facilitating FDI inflow. The research emphasizes that policy frameworks in these nations must reduce foreign debt in order to create an environment that is favorable for greater foreign direct investment.

Connect Globally, Thrive Locally: The Spillover Effect of Sister-City Inward FDI on Regional Innovation

Sister cities are a prevalent form of subnational intergovernmental relationships. Such relationships can play an important role in attracting foreign direct investment (FDI). However, we know little about whether and how these relationships influence the localized impacts of FDI in host countries, which is pivotal in achieving the United Nation's Sustainable Development Goals. By integrating the literature on FDI spillover and sister cities, our study proposes that the higher the FDI percentage received by a city from its sister city, the greater the number of patents applied for by firms in that city. Our sample consists of 7273 inward FDI projects into China from 1558 cities in 77 countries between 2003 and 2008. The analysis results support our assumption. We also find that this positive effect is stronger when FDI projects are from recently established sister cities, when the asymmetry in the global economic networks of the two sister cities is smaller, and when regional marketization in host-country is higher.

The relationship between Foreign Direct Investment, trade openness, exchange rate, and Gross Domestic Product per capita in Vietnam

Aim/purpose – This study explores the nexus between Foreign Direct Investment (FDI), trade openness, exchange rate, and Gross Domestic Product (GDP) per capita in Vietnam between 1986 and 2020. Design/methodology/approach – The Vector Error Correction Model (VECM) was used to evaluate the nexus between FDI, trade openness, exchange rate, and GDP per capita in Vietnam between 1986 and 2020. Moreover, the Johansen co-integration test examined the long-run relationship among these variables. Findings – Results address that GDP per capita, FDI, and trade openness may generate an appreciation of the Vietnamese currency in the short run. In the long run, we found that FDI inflows and trade openness support GDP per capita, but the depreciation of Vietnam Dong harms the economic growth of this country in the long run. The Johan- sen co-integration test confirmed a long-run association among GDP per capita, FDI inflows, trade openness, and exchange rate. Results also indicated a unidirectional cau- sality running from GDP per capita and trade openness to FDI and exchange rate. In addition, a bidirectional causality ran from FDI to the exchange rate. Research implications/limitations – Policies were recommended to facilitate macroe- conomic stability for Vietnam. First, fiscal and monetary policies should be carried out to achieve targets in macroeconomic stability, economic development, employment creation, and inflation control. Second, FDI inflows should continue to be encouraged since they accelerate economic growth. Still, FDI projects should concentrate on improving labor skills and technological progress and promoting sustainable development in crucial sectors such as agriculture, energy, and the environment. Third, fostering innovation in exports by shifting focus from raw materials and inputs exports towards processed and high-value-added commodities while also promoting exports from domestic enterprises to reduce reliance on exports from FDI enterprises. Lastly, improving flexible and active exchange rate regimes consistent with real conditions in both domestic and international markets is necessary to stabilize the exchange rate and foreign currency market in Vietnam. Originality/value/contribution – This paper contributes to the field by providing spe- cific policy recommendations for Vietnam. These recommendations aim to stabilize the economy, attract FDI, renovate exports, and implement flexible and active exchange rate regimes. Keywords: Foreign Direct Investment (FDI), trade openness, exchange rate, Gross Domestic Product (GDP) per capita. JEL Classification: E60, O11, O24.

FOREIGN DIRECT INVESTMENT: GLOBAL AND LOCAL FLOWS (THE CASE OF THE REPUBLIC OF NORTH MACEDONIA)

Foreign direct investment (FDI) is the notion that can be summarized in the form in which it represents the process in which an enterprise from one country invests capital in an existing enterprise or in a new enterprise established in another country. The standard definition of foreign direct investment is given by the Organization for Economic Cooperation and Development (OECD), according to which FDI is defined as the establishment of a lasting interest in and significant degree of influence over the operations of an enterprise in one economy by an investor in another economy. FDI has proven to have an expressed importance mainly in allowing the transfer of technology – especially in the form of new types of capital inputs – that cannot be achieved or at least in the form and volume required through financial investment or trade in goods and services. FDI has already proven that it can boost competition in the domestic input market, but also motivates the employment of domestic labor. In recent decades, the global map of inflow and outflow FDI has changed considerably. Traditionally, FDI originated from developed economies, which have recently gained significant ground in the share of FDI flows between geopolitically aligned economies. In particular during financial crises there is substantial evidence that FDI can lead many developing countries to consider it as an inflow of selected private capital and in certain cases even as a single capital inflow. Such a thing finds support in the tendency of economists who insist on the free flow of capital across national borders because it enables capital to have more favorable preconditions for return at the highest rate. However, the tradition has recently been changing, making the largest sector for FDI projects to be closely related to software and IT services. Investors see rising commodity prices, increased geopolitical unrest and political instability, as well as high inflation in an emerging market as the most likely risks at this time. The official data provided by World Bank (WB), International Monetary Fund (IMF), OECD, as well as the local National Bank and State Statistical Office are unanimous that in the last 20 years, North Macedonia has maintained a continuous increase in FDI, but unfortunately, at a comparative level with the countries of the region, it continues to lags behind. The North Macedonian authorities are progressing towards the Precautionary and Liquidity Line (PLL) objectives, including preserving public finances, reducing energy subsidies, tackling high inflation and ensuring financial stability, which will also increase the possibility real for FDI inflows.

CHALLENGES OF CHINA’S FOREIGN DIRECT INVESTMENT UNDER THE “BELT AND ROAD” INITIATIVE IN THE POST-PANDEMIC ERA

The evolution of China’s foreign direct investment (FDI) in countries along the “Belt and Road” represents a cornerstone of this ambitious initiative, with far-reaching implications for global economic dynamics. A comprehensive analysis of this phenomenon is indispensable, not only for fostering China’s economic expansion but also for elevating the “Belt and Road” initiative to unprecedented levels of success and influence. Our exhaustive research endeavor commences with a meticulous deconstruction of the multifaceted “Belt and Road” concept, delving deep into its historical roots, geopolitical significance, and economic ramifications. We then embark on a thorough exploration of the intricate challenges confronting China’s FDI across the diverse tapestry of participating nations and regions, encompassing political, economic, cultural, and environmental dimensions. This nuanced understanding serves as the foundation for developing tailored solutions and strategic recommendations designed to address these complex issues with precision and foresight. Our study aims to conduct an in-depth analysis and meticulous evaluation of the multifaceted risks associated with China’s FDI under the “Belt and Road” Initiative in the post-pandemic landscape, while concurrently formulating robust and effective countermeasures. We endeavor to shed light on the profound and transformative ways in which the global economic terrain, irrevocably reshaped by the COVID-19 pandemic, molds and influences China’s international investment strategies. This includes examining the pandemic’s impact on supply chains, market demands, and geopolitical relationships, all of which have significant bearing on FDI decisions and outcomes. Furthermore, we present a comprehensive array of meticulously crafted recommendations, not only to safeguard China’s economic interests but also to cultivate sustainable and mutually advantageous development in partner countries along the Belt and Road routes. These recommendations span various domains, including risk mitigation strategies, enhanced due diligence processes, and innovative financing models that align with post-pandemic realities. To execute this study with unparalleled rigor and precision, we employ a diverse and sophisticated array of cutting-edge research methodologies. Our analytical framework incorporates a meticulous examination of extensive statistical data pertaining to FDI distribution, enabling us to identify overarching trends, discern subtle patterns, and pinpoint specific effects with remarkable accuracy. This includes analyzing historical FDI flows, sector-specific investments, and regional variations to provide a comprehensive picture of China’s investment landscape. Furthermore, we leverage advanced econometric modeling techniques to conduct a granular and nuanced analysis of the impact exerted by a wide spectrum of risk factors on FDI performance. These models account for various economic indicators, political stability indices, and pandemic-related variables to provide a holistic view of the investment environment. This approach allows us to rigorously test and validate the efficacy of our proposed countermeasures, ensuring their practical applicability and potential for success. By adopting this multifaceted and interdisciplinary approach, we ensure a truly comprehensive and deeply nuanced understanding of the intricate and dynamic interplay of factors shaping China’s FDI landscape under the “Belt and Road” Initiative. Our methodology also incorporates qualitative analyses, including case studies of successful and challenging FDI projects, interviews with key stakeholders, and comparative analyses with other global investment initiatives, further enriching our insights and recommendations.

Investasi Asing Langsung, Perdagangan Internasional, dan Kualitas Lingkungan di Indonesia

This paper investigates the influence of foreign direct investment and international trade on environmental quality in Indonesia from 1990 to 2018. Environmental quality is measured by carbon dioxide emissions. The estimation method employed is autoregressive distributed lag. This study finds that foreign direct investment positively affects carbon dioxide emissions in the short term but has no impact in the long term. International trade positively affects carbon dioxide emissions in the short and long terms. The results recommend policymakers in Indonesia control carbon dioxide emissions from foreign direct investment projects and export and import activities.

Determinants of Foreign Direct Investment in Oman

Foreign Direct Investment (FDI) has changed worldwide due to the acute financial and economic crises that the world has witnessed in the last decades. The world economy changed rapidly, where many states became hostile towards FDI, particularly in conflict zones. Such an attitude has changed since many countries realized the benefits of FDI and its contribution to their economies. The research uses a qualitative method to provide more substantial evidence for the findings through convergences and rationale of finding. It will also increase the generalization of the results and adds to a better understanding of FDI and encourage researchers to identify the barriers and obstacles in attracting more FDI projects to Oman, such as legislative, bureaucracies, market size, and the investment climates. The outcome of this research reveals the challenges that foreign direct investment in Oman. These are bureaucracy, the investment climate, which is related to the rules and regulation, the market size of Oman, which is considered very small in international scales, and the Omanization project, which aims to replace the expatriate's workforce with nationals. This research paper conducted a SWOT analysis for Oman's investment environment, which showed many strong points as Oman enjoyed many opportunities that the government might take as the opportunities to use those as drivers to enhance the foreign direct investment inflow to Oman. Much of the analysis showed some weak points where the government should tackle it and improve it. This study took Singapore and the United Arab Emirates as secondary case studies, where both states had a successful experience in attracting foreign direct investment due to different policies where the Oman government can learn from such practices.
 Keywords: Determinants, Motivators, Foreign, Investment, Oman

Impact of Foreign Enterprises’ Capital Inflow on Urbanization Factors: Evidence from Northeastern Cities of China

This study investigates the impact of foreign capital inflow and the number of contracted foreign direct investment projects on urbanization. The study focused on the less-explored provinces of Liaoning, Jilin, and Heilongjiang, covering the period from 2007 to 2021. The definition of urbanization was expanded to include three elements: the urbanized labor force, emission and pollution levels, and the productivity of services in the economy. Most importantly, an urbanization index was generated to estimate the total effect of foreign capital investment on sustainable green urbanization. The analysis employs both random and fixed effects regression models, complemented by robustness checks using the generalized least squares (GLS) method. The findings indicate that while foreign capital investments contribute positively to labor urbanization and service productivity, they have a notably adverse impact on environmental quality in the examined cities. Moreover, our findings confirm an overall inverse relationship between foreign capital investment and the urbanization index: the negative impact is primarily driven by inadequate procedures for emissions control in the northeastern Chinese cities. In conclusion, this research provides insights and strategic recommendations for promoting sustainable green urbanization.

Political stability and foreign direct investment inflows in 25 Asia-Pacific countries: the moderating role of trade openness

This article analyzes how trade openness and political stability affect foreign direct investment (FDI) in 25 Asia-Pacific countries from 1990 to 2020. This study employs the dynamic system Generalized Method of Moments to mitigate the heteroskedasticity and autocorrelation issues. We also perform the Johnson–Neyman test to examine whether trade openness moderates the relationship between political stability and FDI. Our findings show that trade openness positively affects FDI, while political stability has a negative effect. Noticeably, the Johnson–Neyman test indicates that Trade Openness moderates the relationship between political stability and FDI in Asia-Pacific nations. Trade openness and its moderating role remained robust before the 2008 financial crisis. The impacts of trade openness and political stability on FDI persist in non-tax-heaven countries. Our findings align with market-seeking, efficiency, resource-seeking, and regulatory risk theories. Finally, these findings are helpful for policymakers to attract FDI projects sustainably across the Asia-Pacific region.

Trade and value chain participation: Domestic firms and FDI spillovers in Africa

AbstractData on the location of foreign direct investment (FDI) projects within and across African nations are combined with firm‐level survey data and information on sectoral input–output relationships to assess what types of FDI are more likely to influence participation in global value chains (GVCs) and to investigate the relationship between FDI and the performance of proximate domestic firms. Firm‐level analysis finds evidence of vertical spillovers from exposure to FDI, mainly in the manufacturing sector: domestic firms located near FDI projects that offer potential supply or demand linkages are more likely to engage in trade through imports or exports. Proximity to FDI projects in the same sector (horizontal linkage) is less likely to affect trade or GVC performance of domestic firms. Both vertical and horizontal FDI linkages are associated with higher labour productivity and other dimensions of performance.

Export‐platform foreign direct investment and trade policy uncertainty: Evidence from brexit

AbstractThis paper analyses the effect of trade policy uncertainty in a customs union on export‐platform foreign direct investment (FDI). First, I develop a partial equilibrium framework with heterogeneous firms based on the proximity–concentration trade‐off that involves trade policy uncertainty about trade costs inside a customs union. Second, I derive an empirical equation that I test by exploiting the 2016 Brexit referendum as a natural experiment and using data on manufacturing greenfield FDI projects. The results show that trade policy uncertainty impacted negatively the decisions of firms to invest in export‐platform activities in the UK following the Brexit referendum. Moreover, I find that extra‐EU manufacturing firms preferred EU countries as opposed to the UK for new investments after the 2016 referendum.

Foreign direct investment and urban growth in Vietnam: spatial, economic, and demographic perspectives

ABSTRACT This research reviews the volume and the spatial pattern of Foreign Direct Investment (FDI) over three decades in Vietnam. Since Vietnam embraced the market mechanism, Doi Moi, in 1986, foreign investments have become a crucial part of Vietnam, integrating with the world economy beyond former communist countries. Analysing the profiles of 24,624 FDI projects reported in the period 1988–2017, this research has observed the following three interlocked features. (1) Spatial development. Along with growing volume, inward FDI has been highly concentrated in the two top-tier city-regions: the Ho Chi Minh City Region (HCMCR) and the Hanoi Capital Region (HCR). These two city-regions have attracted almost 60% of inward FDI. (2) Economic development. The economic dominance of FDI activities has been observed in these two FDI city-regions. While the HCMCR has attracted a wider range of industries from diverse investors, the HCR has been more specialised in high-tech manufacturing with investments from a smaller mix of origin countries. (3) Globalised demographic development. Inward FDI has been tied up with the influx of foreign nationals. The case of Vietnam illustrates how FDI flows have facilitated territorial changes and urban growth.

Beyond Pandering: Investment Project Quality, Voter Support, and the Use of Investment Incentives

AbstractWhy are politicians selective in granting investment incentives to foreign direct investment (FDI) projects? One understudied reason is that politicians want to minimize backlash from voters. In this article, I present the first study to systematically analyze voter preferences toward investment incentives. I theorize that voters should be more likely to support investment incentives for FDI projects that they perceive as “high quality”—that is, projects that voters perceive to be highly effective in improving the living standards of their communities. As a result, I expect that politicians who support low-quality FDI projects with incentives will lose voter support. A factorial survey experiment in the United States provides evidence in favor of this argument. Voters reward politicians only if they provide investment incentives to high-quality projects. An additional conjoint survey experiment highlights the importance of project characteristics that indicate high quality in increasing the approval of investment incentives. To demonstrate the external validity of these experimental results, I present descriptive evidence that illustrates the consistencies between the determinants of investment incentives for FDI projects and voter preferences.