Relationship between Foreign Direct Investment and Country Population

Abstract

The research on the factors that influence foreign direct investment (FDI) has ignored the role of population of a country. Such neglect seems to be motivated by the theoretical support for the assumption that large population is likely to be negatively related to economic growth. Based on a review of the latest research on the role of population in economic growth and the determinants of FDI, it was hypothesized that a country’s population would be positively related to FDI. The data from 56 African and Asian countries supported the hypothesis.