Effect of judıcıal independence to FDI into Eastern Europea and South Asia

In this paper, we investigate the impact of judicial independence on foreign direct investment (FDI) into Southern Europe and South Asia. The panel least square method is employed to estimate the relationship between FDI and its potential macroeconomic and instutional determinants using a sample of 28 developing countries for the period of 1990-2010. The findings show that a 10% percentage increase in judicial independence of the host country in the previous one year increases the FDI inflows to Eastern Europe and South Asia about 2,7% and 1,3% respectively. The findings also show that the size of economic activity (GDP and GDP per capita), deposit interest rate, trade opennes, and lagged FDI are main determinants of FDI inflows to host country.