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Exploring the role of FDI in enhancing the entrepreneurial activity in Europe: a panel data analysis

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  • Claudiu Tiberiu Albulescu

    () (Politehnica University of Timisoara
    University of Poitiers)

  • Matei Tămăşilă

    (Politehnica University of Timisoara)

Abstract

Abstract This paper explores the impact of foreign direct investment (FDI) on the entrepreneurial activity in 16 European countries. By using Global Entrepreneurship Monitor (GEM) data, which enables the distinction necessity-driven vs. opportunity-driven entrepreneurs, we assess the influence of both inward and outward FDI on the entrepreneurial activity during the time span 2005–2012. We resort to a static, as well as to a dynamic panel data analysis. Our findings highlight the fact that the FDI has no clear influence on the total entrepreneurial activity, or on the established business ownership rate. Nevertheless, our results clearly state that both inward and outward FDI positively influences the necessity-driven entrepreneurs, while having a negative impact on the opportunity-driven entrepreneurs. The results prove to be robust regarding the use of a fixed and random effects panel model, two stages least square (2SLS) model, as well as the use of a system-Generalized Method of Moments (system-GMM) approach.

Suggested Citation

  • Claudiu Tiberiu Albulescu & Matei Tămăşilă, 2016. "Exploring the role of FDI in enhancing the entrepreneurial activity in Europe: a panel data analysis," International Entrepreneurship and Management Journal, Springer, vol. 12(3), pages 629-657, September.
  • Handle: RePEc:spr:intemj:v:12:y:2016:i:3:d:10.1007_s11365-015-0360-9
    DOI: 10.1007/s11365-015-0360-9
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    Cited by:

    1. Mihai Mutascu & Aurora Murgea, 2017. "Globalization and financial performances in French cosmetic industry," Working Papers halshs-01504099, HAL.
    2. repec:kap:jtecht:v:43:y:2018:i:3:d:10.1007_s10961-017-9575-y is not listed on IDEAS
    3. Sara Amoroso & Bettina Müller, 2018. "The short-run effects of knowledge intensive greenfield FDI on new domestic entry," The Journal of Technology Transfer, Springer, vol. 43(3), pages 815-836, June.

    More about this item

    Keywords

    Entrepreneurship; FDI; Panel data analysis; European countries; GEM statistics;

    JEL classification:

    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models

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