The IMF Working Papers series is designed to make IMF staff research available to a wide audience. Almost 300 Working Papers are released each year, covering a wide range of theoretical and analytical topics, including balance of payments, monetary and fiscal issues, global liquidity, and national and international economic developments.
It is common for IMF-supported adjustment programs with low-income member countries
(LICs) to project that they will facilitate FDI inflows. The main objective of this paper is to
empirically examine this hypothesis. Using an unbalanced panel dataset for 73 low-income
countries over the period 1980-2012, and two different econometric methods that address the
selection-bias problem, the empirical results robustly show that participating in IMF-supported
program is associated with a significant increase in FDI inflows.