Inappropriate pooling of wealthy and poor countries in empirical FDI studies
Document Type
Contribution to Book
Language
eng
Format of Original
23 cm, 24 p.
Publication Date
2005
Publisher
Peterson Institute for International Economics
Source Publication
Does Foreign Direct Investment Promote Development?
Source ISSN
0881323810
Abstract
This paper examines the question of whether less-developed countries' (LDCs') experiences with foreign direct investment (FDI) systematically different from those of developed countries (DCs). We do this by examining three types of empirical FDI studies that typically do not distinguish between LDCs and DCs in their analysis. First, we find that the underlying factors that determine the location of FDI activity across countries vary systematically across LDCs and DCs in a way that is not captured by current empirical models of FDI. Second, the effect of FDI on economic growth is one that is only supported for LDCs in the aggregate data, not DCs. Third, the evidence suggests that FDI is much less likely to crowd out (more likely to crowd in) domestic investment for LDCs than DCs.
Recommended Citation
Blonigen, Bruce A. and Wang, Miao, "Inappropriate pooling of wealthy and poor countries in empirical FDI studies" (2005). Economics Faculty Research and Publications. 110.
https://epublications.marquette.edu/econ_fac/110
Comments
"Inappropriate pooling of wealthy and poor countries in empirical FDI studies," in Does Foreign Direct Investment Promote Development?. Eds. Bruce A. Blonigen and Miao Wang. Peterson Institute for International Economics, 2005, pp 221-244. Publisher link.