Research About The Influence Of BRICS’ Doing Business On Foreign Direct Investment

As emerging economies, BRICS have rapid economic development and expanding scale, whose total FDI inflows have more than 28% of the world’s in 2014. These show that BRICS have a growing influence on international economic activities. Doing Business indicators reflect the economic costs and time costs required to open and operate a business. As the concept of Doing Business indicators are put forward just about ten years, there are few literatures to study the influence of BRICS’ doing business on foreign direct investment at present. The directions of the researchers are even less especially at home. Literature reviews show that the relationship between BRICS’doing business and inward FDI neither has reached a consensus conclusion in academia, nor has formed a recognized analytical framework yet. In the selection of indicators, previous scholars analyzed doing business mostly by adopting partial index, which ignores the aggregate impact of doing business as a whole. In the study of inward FDI, Previous scholars only selected the FDI flows or stocks, which lacks a comprehensive analysis of this index. In summary, the research on the relationship between BRICS’doing business and inward FDI needs to be strengthened.Aiming at the limitations of existing research, the paper tries to analyze the relationship between BRICS’doing business overall indicators and inward FDI flows and stocks on the basis of clustering analysis. Based on systematic review of previous studies, the article selects twelve doing business indicators that affect the life cycle of the enterprise, getting the doing business survey data of the five BRICS countries provided by the world bank group. The Eviews 7 is used to make the regression analysis of panel data model in 2006-2014, examining the influence of BRICS’doing business on FDI flows and stocks at the national level. Based on the empirical analysis, the paper gets the following conclusions:(1) The improvement of BRICS’doing business is beneficial to the next year inward FDI stocks, but it has no significant correlation with the next year inward FDI flows. (2) Further country studies show that Russian, South African, and Chinese inward FDI stocks are caused by doing business indicators. But Brazilian, Indian inward FDI stocks are not caused by doing business indicators. On the basis of empirical research, some policy suggestions are put forward to improve doing business indicators.This study is not only a validation of the results of previous studies, but also to describe the influence mechanism of BRICS’doing business on FDI flows and stocks. Combined with BRICS’actual situation, it’s expected that constantly adjustments of BRICS’doing business by making more reasonable and effective investment policies on this basis are to further improve the quality of supervision, and to promote the inward FDI.