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FDI and trade: A Granger causality analysis in a heterogeneous panel

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  • Raphaël Chiappini

    ()
    (LAREFI, University Bordeaux IV Montesquieu)

Abstract

This paper will investigate the Granger causality between outward Foreign Direct Investment (FDI) and the exports of goods and services in 11 European countries from 1996 to 2008. Using a new method to evaluate causality in a heterogeneous panel, we find that the causal relationship from FDI to exports is homogeneous among the panel. However, we find strong evidence of a heterogeneity of the causal relationship from exports to FDI in our sample.

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File URL: http://www.accessecon.com/Pubs/EB/2011/Volume31/EB-11-V31-I4-P270.pdf
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Bibliographic Info

Article provided by AccessEcon in its journal Economics Bulletin.

Volume (Year): 31 (2011)
Issue (Month): 4 ()
Pages: 2975-2985

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Handle: RePEc:ebl:ecbull:eb-11-00521

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Keywords: Foreign direct investment; exports; Granger causality; heterogeneous panel;

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References

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  14. Im, Kyung So & Pesaran, M. Hashem & Shin, Yongcheol, 2003. "Testing for unit roots in heterogeneous panels," Journal of Econometrics, Elsevier, vol. 115(1), pages 53-74, July.
  15. Clausing, Kimberly A, 2000. "Does Multinational Activity Displace Trade?," Economic Inquiry, Western Economic Association International, vol. 38(2), pages 190-205, April.
  16. Lionel Fontagné & Michaël Pajot, 1997. "How Foreign Direct Investment Affects International Trade and Competitiveness: an Empirical Assessment," Working Papers 1997-17, CEPII research center.
  17. Lipsey, Robert E & Weiss, Merle Yahr, 1981. "Foreign Production and Exports in Manufacturing Industries," The Review of Economics and Statistics, MIT Press, vol. 63(4), pages 488-94, November.
  18. Bruce A. Blonigen & Ronald B. Davies & Glen R. Waddell & Helen T. Naughton, 2004. "FDI in Space: Spatial Autoregressive Relationships in Foreign Direct Investment," NBER Working Papers 10939, National Bureau of Economic Research, Inc.
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Citations

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Cited by:
  1. Chaido Dritsaki & Melina Dritsaki, 2012. "Exports and FDI: A Granger causality analysis in a heterogeneous panel," Economics Bulletin, AccessEcon, vol. 32(4), pages 3128-3139.
  2. Raphaël Chiappini, 2013. "Do Overseas investments create or replace trade? New insights from a macro-sectoral study on Japan," Working Papers hal-00854109, HAL.
  3. Raphaël Chiappini, 2013. "Do Overseas Investments Create or Replace Trade? New insights from a Macro-Sectoral Study on Japan," GREDEG Working Papers 2013-24, Groupe de REcherche en Droit, Économie, Gestion (GREDEG CNRS), University of Nice Sophia Antipolis, revised Mar 2014.

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