The Effect of War, level of Democracy and Export of Fuel on FDI

The paper investigates the impact of wars, export fuel, level of democracy and their interaction effect on NFDI. I used the fixed effect regression methods for longitudinal data to regress data about 105 developing countries over the period 2002:2014. As expected I found that war has a negative effect on NFDI. Furthermore, the effect of an increase of one unit in level of democracy on NFDI is substantially higher in periods of war than in periods of peace. Thus, it suggests that foreign investors value much more the protection and rights derived from an increase in the level of democracy during periods of war.