Foreign Direct Investment and Domestic Entrepreneurship: Blessing or Curse?
AbstractThis paper explores the effects of foreign direct investment, measured by mergers and acquisitions, on domestic entrepreneurial entry. We use a micro‐panel of more than two thousand individuals disaggregated by industry in seventy countries including both developed and developing economies, 2000‐2009. The theory yields ambiguous predictions about the relationship between FDI and entrepreneurship; positive spillovers via dissemination of technology or negative because of crowding out. Our empirical analysis is conducted at three levels of aggregation. We find the relationship between FDI and domestic entrepreneurship in aggregate and intra‐industry to be negative. Policies need to consider how to counteract this effect.
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Bibliographic InfoPaper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 7796.
Length: 37 pages
Date of creation: Dec 2013
Date of revision:
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Find related papers by JEL classification:
- F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
- M13 - Business Administration and Business Economics; Marketing; Accounting - - Business Administration - - - New Firms; Startups
- L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-12-15 (All new papers)
- NEP-CSE-2013-12-15 (Economics of Strategic Management)
- NEP-ENT-2013-12-15 (Entrepreneurship)
- NEP-INT-2013-12-15 (International Trade)
- NEP-SBM-2013-12-15 (Small Business Management)
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