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Reexamining the Conditional Effect of Foreign Direct Investment

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  • Bruno, Randolph Luca

    () (University College London)

  • Campos, Nauro F

    () (Brunel University)

Abstract

The prevailing consensus is that foreign direct investment (FDI) effects are conditional. At the macro level, they depend upon minimum levels of human capital or financial development, while at the micro level, they depend on type of linkage (forwards, backwards, or horizontal). This paper presents new evidence showing that these effects are substantially less "conditional". We use a meta-analysis on two data sets covering 549 micro and 553 macro estimates of the effects of FDI on performance. We find these effects tend to be larger in macro than in micro studies, and greater in low- than in high-income countries.

Suggested Citation

  • Bruno, Randolph Luca & Campos, Nauro F, 2013. "Reexamining the Conditional Effect of Foreign Direct Investment," IZA Discussion Papers 7458, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp7458
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    Cited by:

    1. Hayat, Arshad, 2016. "Foreign Direct Investment, Institutional Framework and Economic Growth," MPRA Paper 74563, University Library of Munich, Germany.
    2. Cristina JUDE & Grégory LEVIEUGE, 2013. "Growth Effect of FDI in Developing Economies: the Role of Institutional Quality," LEO Working Papers / DR LEO 2251, Orleans Economics Laboratory / Laboratoire d'Economie d'Orleans (LEO), University of Orleans.
    3. Bruno, Randolph Luca & Cipollina, Maria, 2014. "FDI Impact on Firm Performance in Enlarged Europe: Evidence from a Meta-Regression Analysis," IZA Discussion Papers 8085, Institute for the Study of Labor (IZA).
    4. Ines TROJETTE, 2016. "The Effect Of Foreign Direct Investment On Economic Growth: The Institutional Threshold," Region et Developpement, Region et Developpement, LEAD, Universite du Sud - Toulon Var, vol. 43, pages 111-138.
    5. Silvia Dal Bianco & Nguyen Cong To Loan, 2017. "FDI Inflows, Price and Exchange Rate Volatility: New Empirical Evidence from Latin America," International Journal of Financial Studies, MDPI, Open Access Journal, vol. 5(1), pages 1-17, February.
    6. Jean-Louis COMBES & Patrick PLANE & Tidiane KINDA & Rasmané OUEDRAOGO, 2017. "Does It Pour When it Rains? Capital Flows and Economic Growth in Developing Countries," Working Papers P157, FERDI.
    7. Hayat, Arshad & Cahlik, Tomas, 2017. "FDI and Economic Growth: A Changing Relationship Across Country and Overtime," MPRA Paper 78240, University Library of Munich, Germany.
    8. hayat, arshad, 2017. "FDI and economic growth: Evidence on the Role of the Size of Natural Resource Sector," MPRA Paper 76205, University Library of Munich, Germany.
    9. repec:sgm:resrep:v:2:i:22:y:2016:p:201-212 is not listed on IDEAS

    More about this item

    Keywords

    foreign direct investment; economic growth; firm performance; meta-regression-analysis;

    JEL classification:

    • C83 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Survey Methods; Sampling Methods
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development

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