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How global is FDI? Evidence from the analysis of Theil indices

Author

Listed:
  • Frank Bickenbach

    (Kiel Institute for the World Economy)

  • Wan-Hsin Liu

    () (Kiel Institute for the World Economy)

  • Peter Nunnenkamp

    (Kiel Institute for the World Economy)

Abstract

It is open to question whether the intensified worldwide competition for FDI has reduced its traditionally strong concentration in a few large and relatively advanced host countries. We calculate and decompose Theil indices to track changes in absolute and relative concentration of FDI during the period 1970–2013. We find that both absolute and relative concentration decreased when excluding offshore financial centers from the overall sample. In addition to the narrowing gap between OECD and non-OECD countries, the concentration across non-OECD countries declined for both the absolute and relative measures. This is also true for major subgroups of non-OECD countries. Finally, recent developments indicate that low-income countries are no longer at the losing end of the competition for FDI.

Suggested Citation

  • Frank Bickenbach & Wan-Hsin Liu & Peter Nunnenkamp, 2018. "How global is FDI? Evidence from the analysis of Theil indices," Empirical Economics, Springer, vol. 55(4), pages 1603-1635, December.
  • Handle: RePEc:spr:empeco:v:55:y:2018:i:4:d:10.1007_s00181-017-1346-y
    DOI: 10.1007/s00181-017-1346-y
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    References listed on IDEAS

    as
    1. Peter Nunnenkamp & Rainer Thiele, 2013. "Financing for Development: The Gap between Words and Deeds since Monterrey," Development Policy Review, Overseas Development Institute, vol. 31(1), pages 75-98, January.
    2. Stiglitz, Joseph E., 2000. "Capital Market Liberalization, Economic Growth, and Instability," World Development, Elsevier, vol. 28(6), pages 1075-1086, June.
    3. Frank Bickenbach & Wan-Hsin Liu & Peter Nunnenkamp, 2015. "Regional concentration of FDI in post-reform India: A district-level analysis," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 24(5), pages 660-695, August.
    4. Frank Bickenbach & Eckhardt Bode, 2008. "Disproportionality Measures of Concentration, Specialization, and Localization," International Regional Science Review, , vol. 31(4), pages 359-388, October.
    5. Olivier Cadot & Céline Carrère & Vanessa Strauss-Kahn, 2013. "Trade Diversification, Income, And Growth: What Do We Know?," Journal of Economic Surveys, Wiley Blackwell, vol. 27(4), pages 790-812, September.
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    Cited by:

    1. Bickenbach, Frank & Mbelu, Asithandile & Nunnenkamp, Peter, 2019. "Is foreign aid concentrated increasingly on needy and deserving recipient countries? An analysis of Theil indices, 1995–2015," World Development, Elsevier, vol. 115(C), pages 1-16.

    More about this item

    Keywords

    Foreign direct investment; Concentration; Theil decomposition;

    JEL classification:

    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements

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