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Reverse FDI in Europe: An Analysis of Angola’s FDI in Portugal

Author

Listed:
  • Carlos Barros
  • Bruno Damásio
  • João Faria

Abstract

This paper analyses investment from Angola in Portugal. An open economy model with money laundering is proposed and then tested with a time series Bayesian regression. The result reveals that exports and corruption are the positive determinants of Angola FDI in Portugal. Policy implications are derived.

Suggested Citation

  • Carlos Barros & Bruno Damásio & João Faria, 2011. "Reverse FDI in Europe: An Analysis of Angola’s FDI in Portugal," CEsA Working Papers 98, CEsA - Center for African, Asian and Latin American Studies.
  • Handle: RePEc:cav:cavwpp:wp98
    as

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    File URL: http://pascal.iseg.utl.pt/~cesa/RePEc/cav/cavwpp/wp98.pdf
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    References listed on IDEAS

    as
    1. van den Broeck, Julien & Koop, Gary & Osiewalski, Jacek & Steel, Mark F. J., 1994. "Stochastic frontier models : A Bayesian perspective," Journal of Econometrics, Elsevier, vol. 61(2), pages 273-303, April.
    2. Felipe Larraín & José Tavares, 2004. "Does Foreign Direct Investment Decrease Corruption?," Latin American Journal of Economics-formerly Cuadernos de Economía, Instituto de Economía. Pontificia Universidad Católica de Chile., vol. 41(123), pages 217-230.
    3. Faria, Joao Ricardo & Leon-Ledesma, Miguel A., 2005. "Real exchange rate and employment performance in an open economy," Research in Economics, Elsevier, vol. 59(1), pages 67-80, March.
    4. Koop, Gary & Osiewalski, Jacek & Steel, Mark F. J., 1997. "Bayesian efficiency analysis through individual effects: Hospital cost frontiers," Journal of Econometrics, Elsevier, vol. 76(1-2), pages 77-105.
    5. Katariina Nilsson Hakkala & Pehr-Johan Norbäck & Helena Svaleryd, 2008. "Asymmetric Effects of Corruption on FDI: Evidence from Swedish Multinational Firms," The Review of Economics and Statistics, MIT Press, vol. 90(4), pages 627-642, November.
    6. Razin, Assaf & Sadka, Efraim & Coury, Tarek, 2003. "Trade openness, investment instability and terms-of-trade volatility," Journal of International Economics, Elsevier, vol. 61(2), pages 285-306, December.
    7. Vicente, Pedro C., 2010. "Does oil corrupt? Evidence from a natural experiment in West Africa," Journal of Development Economics, Elsevier, vol. 92(1), pages 28-38, May.
    8. Elhanan Helpman & Marc J. Melitz & Stephen R. Yeaple, 2004. "Export Versus FDI with Heterogeneous Firms," American Economic Review, American Economic Association, vol. 94(1), pages 300-316, March.
    9. Kevin M. Murphy & Andrei Shleifer & Robert W. Vishny, 1991. "The Allocation of Talent: Implications for Growth," The Quarterly Journal of Economics, Oxford University Press, vol. 106(2), pages 503-530.
    10. Matthew Cole & Robert Elliott & Jing Zhang, 2009. "Corruption, Governance and FDI Location in China: A Province-Level Analysis," Journal of Development Studies, Taylor & Francis Journals, vol. 45(9), pages 1494-1512.
    11. Holger Gorg & Henning Muhlen & Peter Nunnenkamp, 2010. "FDI Liberalisation, Firm Heterogeneity and Foreign Ownership: German Firm Decisions in Reforming India," Journal of Development Studies, Taylor & Francis Journals, vol. 46(8), pages 1367-1384.
    12. Lui, Francis T, 1985. "An Equilibrium Queuing Model of Bribery," Journal of Political Economy, University of Chicago Press, vol. 93(4), pages 760-781, August.
    13. Alfaro, Laura & Chanda, Areendam & Kalemli-Ozcan, Sebnem & Sayek, Selin, 2010. "Does foreign direct investment promote growth? Exploring the role of financial markets on linkages," Journal of Development Economics, Elsevier, vol. 91(2), pages 242-256, March.
    14. David J. Spiegelhalter & Nicola G. Best & Bradley P. Carlin & Angelika van der Linde, 2002. "Bayesian measures of model complexity and fit," Journal of the Royal Statistical Society Series B, Royal Statistical Society, vol. 64(4), pages 583-639.
    15. Ali Al-Sadig, 2009. "The Effects of Corruption on FDI Inflows," Cato Journal, Cato Journal, Cato Institute, vol. 29(2), pages 267-294, Winter.
    16. Paolo Mauro, 1995. "Corruption and Growth," The Quarterly Journal of Economics, Oxford University Press, vol. 110(3), pages 681-712.
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    Citations

    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Why does Angola invest in Portugal?
      by Economic Logician in Economic Logic on 2012-05-30 19:15:00
    2. [経済]アンゴラがポルトガルに投資する理由
      by himaginary in himaginaryの日記 on 2012-06-02 12:00:00

    Citations

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    Cited by:

    1. Asongu, Simplice & De Moor, Lieven, 2015. "Financial globalisation and financial development in Africa: assessing marginal, threshold and net effects," MPRA Paper 69448, University Library of Munich, Germany.
    2. Faria, João Ricardo & McAdam, Peter, 2015. "Macroeconomic adjustment under regime change: From social contract to Arab Spring," Journal of International Money and Finance, Elsevier, vol. 56(C), pages 1-22.
    3. repec:eee:mulfin:v:40:y:2017:i:c:p:103-114 is not listed on IDEAS
    4. Asongu, Simplice A., 2017. "Assessing marginal, threshold, and net effects of financial globalisation on financial development in Africa," Journal of Multinational Financial Management, Elsevier, vol. 40(C), pages 103-114.

    More about this item

    Keywords

    FDI; Angola; Portugal; corruption and exports;

    JEL classification:

    • F29 - International Economics - - International Factor Movements and International Business - - - Other
    • O55 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Africa
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics

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