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Direct and indirect effects of FDI in emerging European markets : a survey and meta-analysis

  • Jan Hanousek

    ()

    (CERGE-EI - Center for Economic Research and Graduate Education - Economics Institute)

  • Evžen Kočenda

    ()

    (CERGE-EI - Center for Economic Research and Graduate Education - Economics Institute)

  • Mathilde Maurel

    ()

    (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS)

We review a large body of literature dealing with the effects of Foreign Direct Investment (FDI) on economies during their transformation from a command economic system toward a market system. We report the results of a meta-analysis based on the literature on externalities from FDI. The studies on emerging European markets covered in our survey report direct and indirect FDI effects weakening over time, similarly as in other FDI destination countries. This is imputable to a publication bias that is detected and to the fact that more sophisticated methods and more controls can be used once a sufficient time span is available. Panel studies are likely to find relatively lower spillover effects. The choice of the research design (definition of firm performance and foreign firm presence) matters. More specific to the sampled studies is the role played by forward and backward linkages, which dominate other channels in driving FDI externalities.

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Paper provided by HAL in its series Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) with number halshs-00469544.

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Date of creation: Mar 2010
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Handle: RePEc:hal:cesptp:halshs-00469544
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