Do Institutional Quality and Natural Resources Affect the Outward Foreign Direct Investment of G7 Countries?

This study examined the interactive impact of institutional quality and natural resources of Organization for Economic Co-operation and Development (OECD) countries on outward foreign direct investment (FDI) of G7 countries. This study used data from 2009 to 2017 that covers 36 countries as host and seven countries as a source of foreign direct investment. We found that the institutional quality of OECD countries affects outward FDI of G7 countries to OECD countries. However, the investments of G7 countries in OECD countries are receptive to institutional quality and natural resources. Therefore, OECD countries should improve institutional quality and natural resources and implement individual policies for institutions and natural resources to attract more FDI from G7 countries.