The importance of foreign direct investment (FDI) for the development of renewable energy in developing countries has been increasingly recognized, with a numerous developing countries placing various measures to attract FDI in renewable energy sector. This paper clarifies the relative significance of the determinants behind the location decisions of foreign renewable energy investors by using analytical hierarchy process. In total of 18 determinants that are categorized into macroeconomic environment, institutional environment, natural conditions, and renewable energy policies categories are used for the analysis. The results show that, adding to the traditionally argued determinants of FDI including macroeconomic environment, institutional environment, and natural conditions, renewable energy support policies have equivalent or stronger influence as location determinants of FDI. The paper also points out that some of the traditionally argued determinants such as exchange rate volatility, access to land, and administrative procedure also hold very strong influence as determinants of FDI in renewable energy. Driving from the results of this study, policy implications are made especially focusing on the determinants of FDI in renewable energy with high importance. The relative significance of the determinants clarified through this study offers criteria for prioritizing policies and actions for policy makers.
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