[Step-by-Step] In a 1985 examination of the economic and political determinants of foreign direct investment Schneider and Frey argued that the amount of
Question: In a 1985 examination of the economic and political determinants of foreign direct investment Schneider and Frey argued that the amount of direct foreign investment a country attracts is related to the size of its gross national product, its balance of trade and its level of political risk.
From an analysis of the data for a random sample of countries contained in file "Question 6 Data" , would you support their argument?
If multi-collinearity caused a problem in the analysis, what steps did you take to mitigate its effect?
The structure of the file is as indicated below
| Country |
Foreign Direct
Investment ($B) |
Gross National
Product ($B) |
Trade Balance
($B) |
Political Risk |
| A | ||||
| B | ||||
| : | : | : | : | : |
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