Quarterly Journal of Political Science > Vol 4 > Issue 2

The Effect of Outliers on Regression Analysis: Regime Type and Foreign Direct Investment

Seung-Whan Choi, Assistant Professor, Department of Political Science (M/C 276), University of Illinois at Chicago, whanchoi@uic.edu
 
Suggested Citation
Seung-Whan Choi (2009), "The Effect of Outliers on Regression Analysis: Regime Type and Foreign Direct Investment", Quarterly Journal of Political Science: Vol. 4: No. 2, pp 153-165. http://dx.doi.org/10.1561/100.00008021

Published: 07 Jul 2009
© 2009 S.-W. Choi
 
Subjects
Democracy,  Comparative politics,  Interest groups,  International political economy
 

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In this article:
Why Outliers Matter for Students of Political Science (and Especially FDI)
Conclusion
Appendix 1
References

Abstract

The presence of outliers and influential cases can dramatically change the magnitude of regression coefficients and even the direction of coefficient signs (i.e., from positive to negative or vice versa). When researchers ignore abnormal observations, especially with respect to dependent variables, their empirical results can be misleading. Unfortunately, the fact remains underappreciated in studies of political science. To expound upon the outlier issue, I reexamine an empirical study that reports on two opposing effects of democratic institutions on inflows of foreign direct investment (FDI). In doing so, I illustrate the way influential outliers can drastically affect the substantive results of regression analysis. After properly reanalyzing outlying countries, I conclude that democratic countries attract more FDI than authoritarian countries.

DOI:10.1561/100.00008021

Replication Data | 100.00008021_supp.zip (ZIP).

This file contains the data that is required to replicate the data on your own system.

DOI: 10.1561/100.00008021_supp

Commentary

Outlier, Measurement, and the Democracy-FDI Controversy , Quarterly Journal of Political Science, Volume 4, Issue 2 10.1561/100.00009028