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Inward Foreign Direct Investment and Imports in Spain

  • M. T. Alguacil
  • V. Orts

In this paper, we investigate the links between inward foreign direct investment and imports in Spain. We show that FDI in this country has been trade-oriented, encouraging greater imports. Foreign production thus magnifies its potential gains with the conventional benefits of trade. A cointegration analysis in a multivariate VAR model is applied for Granger temporal causality testing. The strength and direction of the causal relationship are shown through the dynamic variance decomposition and the impulse response technique. [Fl0, F20, F21]

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Article provided by Taylor & Francis Journals in its journal International Economic Journal.

Volume (Year): 17 (2003)
Issue (Month): 3 ()
Pages: 19-38

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Handle: RePEc:taf:intecj:v:17:y:2003:i:3:p:19-38
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