IDEAS home Printed from https://ideas.repec.org/a/bla/reviec/v15y2007i1p146-163.html
   My bibliography  Save this article

Foreign Direct Investment Outflows and Business-cycle Fluctuations

Author

Listed:
  • Miao Wang
  • M. C. Sunny Wong

Abstract

This paper investigates business-cycle effects for a country's foreign direct investment (FDI) outflows. Ordinary least squares and panel regressions show that volatility in economic growth has a negative and significant impact on FDI outflows. Furthermore, we find different types of shocks have asymmetric impacts on FDI outflows. In other words, fluctuations of the same magnitude in a boom and a recession have different effects on FDI outflows. This relationship is more evident in OECD countries. We also include exchange rate volatility, lagged business-cycle measure, and control for potential endogeneity problems as robustness checks. Our findings are robust across different specifications. Copyright © 2007 The Authors; Journal compilation © 2007 Blackwell Publishing Ltd.

Suggested Citation

  • Miao Wang & M. C. Sunny Wong, 2007. "Foreign Direct Investment Outflows and Business-cycle Fluctuations," Review of International Economics, Wiley Blackwell, vol. 15(1), pages 146-163, February.
  • Handle: RePEc:bla:reviec:v:15:y:2007:i:1:p:146-163
    as

    Download full text from publisher

    File URL: http://www.blackwell-synergy.com/links/doi/10.1111/j.1467-9396.2007.00649.x
    File Function: link to full text
    Download Restriction: Access to full text is restricted to subscribers.

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Eugenia Baroncelli & Carsten Fink & Beata Smarzynska Javorcik, 2005. "The Global Distribution of Trademarks: Some Stylised Facts," The World Economy, Wiley Blackwell, vol. 28(6), pages 765-782, June.
    2. Landes, William M & Posner, Richard A, 1987. "Trademark Law: An Economic Perspective," Journal of Law and Economics, University of Chicago Press, vol. 30(2), pages 265-309, October.
    3. Carsten Fink & Beata Smarzynska Javorcik & Mariana Spatareanu, 2005. "Income-Related Biases in International Trade: What Do Trademark Registration Data Tell Us?," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), pages 79-103.
    4. Juan Carlos Hallak, 2003. "The Effect of Cross-Country Differences in Product Quality on the Direction of International Trade 2002," Working Papers 493, Research Seminar in International Economics, University of Michigan.
    5. George A. Akerlof, 1970. "The Market for "Lemons": Quality Uncertainty and the Market Mechanism," The Quarterly Journal of Economics, Oxford University Press, vol. 84(3), pages 488-500.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Doytch, Nadia, 2015. "Sectoral FDI cycles in South and East Asia," Journal of Asian Economics, Elsevier, pages 24-33.
    2. Alexe, Ileana & Tatomir, Cristina F., 2011. "Does economic convergence with the European Union mean more FDI flows to an economy? Analysis on 5 Central and Eastern Europe countries," MPRA Paper 36139, University Library of Munich, Germany.
    3. Kamel ABDELLAH ( GREThA, CNRS, UMR 5113 & ISG, UNIVERSITE DE TUNIS) & Dalila NICET-CHENAF (GREThA, CNRS, UMR 5113) & Eric ROUGIER (GREThA, CNRS, UMR 5113), 2012. "FDI and macroeconomic volatility: A close-up on the source countries," Cahiers du GREThA 2012-21, Groupe de Recherche en Economie Théorique et Appliquée.
    4. Dalila Nicet-Chenaf & Eric Rougier, 2014. "Source and host country volatility and FDI : A gravity analysis of European investment to Middle East and North Africa," Larefi Working Papers 1405, Larefi, Université Bordeaux 4.
    5. Tatomir, Cristina F. & Popovici, Oana, 2011. "Eyes on Romania: what to look when investing here?," MPRA Paper 36140, University Library of Munich, Germany.
    6. Lilia Cavallari & Stefano D'Addona, 2013. "Business cycle determinants of US foreign direct investments," Applied Economics Letters, Taylor & Francis Journals, vol. 20(10), pages 966-970, July.
    7. repec:eee:socmed:v:181:y:2017:i:c:p:74-82 is not listed on IDEAS
    8. Carlos Rodríguez & Ricardo Bustillo, 2015. "Foreign Direct Investment and the Business Cycle: New Insights after the Great Recession," Prague Economic Papers, University of Economics, Prague, pages 136-153.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:reviec:v:15:y:2007:i:1:p:146-163. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley-Blackwell Digital Licensing) or (Christopher F. Baum). General contact details of provider: http://www.blackwellpublishing.com/journal.asp?ref=0965-7576 .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.