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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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Paper provided by FEDEA in its series Working Papers on International Economics and Finance with number 02-01.

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Handle: RePEc:fda:fdadef:02-01
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