Determinants of foreign direct investment during economic transition in Mongolia

This paper investigates the trends, patterns and determinants of foreign investment in Mongolia using a panel data set of 17 countries over 21 years. The empirical evidence suggest market growth rate, quality of infrastructure, geographic proximity and the Chinese economic boom are the important determinants of foreign direct investment in Mongolia. In terms of policy implications, our findings suggest that Mongolia can attract much needed technology and capital for ensuring employment-intensive growth, particularly in manufacturing and agriculture, through further reforms with a heavy focus on infrastructure development.