4.3.2.4. Inflation. Inflation would measure the macroeconomic situation of the region. We hypothesize that multinationals would be attracted to the region with better economic conditions. As in the case of openness, inflation caters to national measures and we are not sure of the significance of this in a single country framework. Inflation is measured as annual growth rate of consumer price index of respective regions. We expect negative influence of high inflation in inflow of FDI.