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Pitfalls in the use of foreign direct investment statistics

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  • Clare O'Mahony
  • Frank Barry

Abstract

Foreign direct investment (FDI) statistics are widely used to study the impact of international capital movements and multinational enterprise (MNE) activities. FDI intensity is also an important indicator of globalisation and economic integration. Datasets spanning long time periods and with broad country coverage have been employed in numerous studies to analyse various aspects of the determinants and consequences of FDI. Focusing on a relatively homogeneous group of six Western European EU countries, the present study finds major inconsistencies in the construction and coverage of these data both through time and across countries, leading to large discrepancies. Asymmetries will be far greater for broader groups of more economically and institutionally diverse countries. This study recommends extreme caution in drawing conclusions based on FDI data.

Suggested Citation

  • Clare O'Mahony & Frank Barry, 2019. "Pitfalls in the use of foreign direct investment statistics," The World Economy, Wiley Blackwell, vol. 42(10), pages 2835-2853, October.
    • Handle: RePEc:bla:worlde:v:42:y:2019:i:10:p:2835-2853
    DOI: 10.1111/twec.12836
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    Cited by:

    1. Tania Gorcheva, 2020. "Processes Of Intelnationalization Of The Tourist Business In Bulgaria," Anniversary Scientific Conference with International Participation TOURISM AND CONNECTIVITY 2020, University publishing house "Science and Economics", University of Economics - Varna, issue 1, pages 259-265, October.
    2. Ofori, Isaac K. & Asongu, Simplice A., 2022. "Repackaging FDI for Inclusive Growth: Nullifying Effects and Policy Relevant Thresholds of Governance," MPRA Paper 111359, University Library of Munich, Germany.
    3. Ibrahim A. Adekunle & Olumuyiwa G. Yinusa & Tolulope O. Williams & Rahmon A. Folami, 2021. "On the Determinant of Financial Development in Africa: Geography, Institutions and Macroeconomic Policy Relevance," Research Africa Network Working Papers 21/054, Research Africa Network (RAN).
    4. Francois Cornelius Wehncke & Patricia Lindelwa Makoni & Godfrey Marozva, 2022. "Nexus Between FDI, ODA and Economic Growth in Developing African Countries: A Systems Approach," Economic Research Guardian, Weissberg Publishing, vol. 12(2), pages 97-114, December.
    5. Ofori, Isaac K. & Asonngu, Simplice A., 2021. "Foreign Direct Investment, Governance and Inclusive Growth in Sub-Saharan Africa," MPRA Paper 108178, University Library of Munich, Germany.
    6. Markus Leibrecht & Christian Bellak, 2023. "Investment policy reform as a driver of foreign direct investment: Evidence from China," Economics of Transition and Institutional Change, John Wiley & Sons, vol. 31(4), pages 1035-1053, October.
    7. Oana Cristina POPOVICI & Adrian Cantemir CĂLIN & Diana IVANA & Sorin DAN, 2021. "FDI Determinants Revisited: Extensive Evidence," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(4), pages 103-123, December.
    8. Bellak, Christian & Leibrecht, Markus & Chaisse, Julien, 2022. "Reforming International Investment Agreements," Department of Economics Working Paper Series 328, WU Vienna University of Economics and Business.
    9. Emma Serwaa Obobisa & Haibo Chen & Emmanuel Caesar Ayamba & Claudia Nyarko Mensah, 2021. "The Causal Relationship Between China-Africa Trade, China OFDI, and Economic Growth of African Countries," SAGE Open, , vol. 11(4), pages 21582440211, December.
    10. Nicholas M. Odhiambo, 2022. "Does Foreign Direct Investment Spur Economic Growth? New Empirical Evidence From Sub-Saharan African Countries," Economic Annals, Faculty of Economics and Business, University of Belgrade, vol. 67(233), pages 61-84, April – J.
    11. Christian Bellak & Markus Leibrecht & Julien Chaisse, 2022. "Reforming International Investment Agreements: The Case of China and Foreign Direct Investment," Department of Economics Working Papers wuwp328, Vienna University of Economics and Business, Department of Economics.

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