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Does FDI Promote Entrepreneurial Activities? A Meta-Analysis

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This study uses meta-analysis to analyze 557 estimates from 35 studies that estimate the effect of inward FDI on entrepreneurial activity. We address two questions: (i) Does FDI lead to greater entrepreneurial activity in host countries? (ii) What factors are responsible for the different estimates across studies? In addressing these questions, we make two methodological contributions. We extend the new Andrews-Kasy meta-analysis estimators (Andrews & Kasy, 2019) to allow for explanatory variables, and we develop a nested framework of multiple meta-analysis models that allows for testing between models and model selection. We estimate that, across all studies, the average estimated effect of FDI on entrepreneurship is positive but small in size, and statistically insignificant. In contrast, the average effect from studies that control for endogeneity is negative and statistically significant.

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  • Sanghyun Hong & W. Robert Reed & Bifei Tian & Tingting Wu & Gen Chen, 2019. "Does FDI Promote Entrepreneurial Activities? A Meta-Analysis," Working Papers in Economics 19/06, University of Canterbury, Department of Economics and Finance.
  • Handle: RePEc:cbt:econwp:19/06
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    4. Wanglin Ma & Sanghyun Hong & W. Robert Reed & Jianhua Duan & Phong Luu, 2023. "Yield effects of agricultural cooperative membership in developing countries: A meta‐analysis," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 94(3), pages 761-780, September.

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    More about this item

    Keywords

    Meta-analysis; FDI; Entrepreneurship;
    All these keywords.

    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
    • C10 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - General

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