Monday, October 05, 2015

Mistrust, FDI, and Trade (No Relationship!?)

Below are two plots of the level of mistrust in a country (the portion choosing either "don't trust very much" or "don't trust at all" when asked about people of other nationalities, WVS Wave 6 data) against (1) foreign direct investment as a percentage of GDP, and (2) openness (exports + imports) as a percentage of GDP (both from WB, WDI).

The two fail to exhibit any significant relationship. (The outlier countries with moderate levels of mistrust and very high levels of FDI/GDP and (X+M)/GDP are the Netherlands and Singapore. Removing them makes the relationship even less significant).


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