Graduation Year

Spring 2013

Document Type

Campus Only Senior Thesis

Degree Name

Bachelor of Arts



Reader 1

S. Brock Blomberg

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Terms of Use for work posted in Scholarship@Claremont.

Rights Information

© 2013 Elizabeth J. Petit


This paper employs an augmented gravity model for a sample of 96 host countries to examine the impact of host country rule of law on direct investment from the United States. This paper further investigates the gap between property rights and freedom from corruption, the two primary components of a country’s rule of law. Property rights and freedom from corruption are both shown to have a significant positive effect on U.S. outward foreign direct investment. This thesis argues that freedom from corruption is a more powerful measure than property rights for determining the location of U.S. direct investment. This suggests that for host countries, reducing the level of corruption may be more effective at stimulating direct capital investment from U.S. investors than expanding property rights.

This thesis is restricted to the Claremont Colleges current faculty, students, and staff.