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The impact of FDI on industry performance

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Author Info

  • Jürgen Bitzer

    (Free University Berlin Department of Economics & Institute for East European Studies)

  • Holger Görg

    (Centre for Research on Globalisation & Economic Policy, School of Economics, University of Nottingham)

Abstract

This paper investigates the productivity effects of inward and outward foreign direct investment using industry and country level data for 17 OECD countries. The paper relates to a large recent literature on productivity spillovers from inward FDI, however, we also consider the relationship between productivity and outward FDI in the same estimation. Our results show that there are, on average, productivity benefits from inward FDI, although we can identify a number of countries which, on aggregate, do not appear to benefit in terms of productivity. On the other hand, a country's stock of outward FDI is, on average, negatively related to productivity. However, again there is substantial heterogeneity in the effect across OECD countries.

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File URL: http://128.118.178.162/eps/it/papers/0505/0505003.pdf
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Bibliographic Info

Paper provided by EconWPA in its series International Trade with number 0505003.

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Length: 27 pages
Date of creation: 04 May 2005
Date of revision:
Handle: RePEc:wpa:wuwpit:0505003

Note: Type of Document - pdf; pages: 27
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Web page: http://128.118.178.162

Related research

Keywords: Foreign direct investment; inward FDI; outward FDI; productivity; spillovers;

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References

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Citations

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Cited by:
  1. Priit Vahter & Jaan Masso, 2006. "Home versus Host Country Effects of FDI: Searching for New Evidence of Productivity Spillovers," William Davidson Institute Working Papers Series 820, William Davidson Institute at the University of Michigan.
  2. Maryia Akulava, 2011. "The Impact of Foreign Direct Investment on Industrial Economic Growth in Belarus," BEROC Working Paper Series 11, Belarusian Economic Research and Outreach Center (BEROC).
  3. Wen-Chung Hsu & Xingbo Gao & Jianhua Zhang & Hsin Mei Lin, 2011. "The effects of outward FDI on home-country productivity: Do location of investment and market orientation matter?," Journal of Chinese Economic and Foreign Trade Studies, Emerald Group Publishing, vol. 4(2), pages 99-116, June.
  4. Nigel Driffield & James Love & Karl Taylor, 2008. "Productivity and Labour Demand Effects of Inward and Outward FDI on UK Industry," Working Papers 2008001, The University of Sheffield, Department of Economics, revised Jan 2008.

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