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Foreign direct investment and trade: A causality analysis

  • Oscar Bajo
  • María Montero

In this article, we analyze the relationship between outward foreign direct investment (FDI) and exports, using Spanish quarterly data for the period 1977–1998, by means of Granger causality tests in a cointegration framework. Our results point to the existence of a relationship of complementarity between both variables, with Granger causality running in the short run from outward FDI to exports, and bilateral Granger causality in the long run. Copyright Kluwer Academic Publishers 2001

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Paper provided by FEDEA in its series Studies on the Spanish Economy with number 06.

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Handle: RePEc:fda:fdaeee:06
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