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A time varying coefficient model for panel data: Foreign Direct Investment in European OECD countries

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  • Mariel Chladkova, Petr
  • Rodríguez González, Carlos
  • Orbe Mandaluniz, Susan

Abstract

The present article reexamines some of the issues regarding the Knowledge-Capital Model that encompasses both horizontal and vertical Foreign Direct Investment described in detail in the literature. The empirical support for this model is however a mixture. This article proposes a new way of estimating coefficients by allowing them to vary over time. The estimation results obtained using data from fourteen European countries for the period from 1982 to 2004 confirm that these coefficients cannot be considered constant over time and that the vertical component of the Knowledge-Capital Model is relevant even in the context of European countries with relatively similar endowments.

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Bibliographic Info

Paper provided by Universidad del País Vasco - Departamento de Economía Aplicada III (Econometría y Estadística) in its series BILTOKI with number 2007-03.

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Date of creation: Apr 2007
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Handle: RePEc:ehu:biltok:200703

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Postal: Dpto. de Econometría y Estadística, Facultad de CC. Económicas y Empresariales, Universidad del País Vasco, Avda. Lehendakari Aguirre 83, 48015 Bilbao, Spain
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Keywords: time-varying coefficients; foreign direct investment;

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  19. repec:rus:hseeco:122512 is not listed on IDEAS
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