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FDI in Space: Spatial Autoregressive Relationships in Foreign Direct Investment

  • Bruce A. Blonigen
  • Ronald B. Davies
  • Glen R. Waddell
  • Helen T. Naughton

Theoretical models of foreign direct investment (FDI) have only recently begun to model the role of third countries, and the empirical FDI literature has almost exclusively examined bilateral FDI data without recognizing the potential interdependence between FDI decisions to alternative host countries. This paper uses spatial econometric techniques to examine the spatial correlation between FDI to alternative (neighboring) regions. The sign of such correlations can provide evidence for or against alternative theories for FDI motivations. Using data on OECD countries from 1980-2000, we find evidence consistent with export platform FDI in Europe.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 10939.

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Date of creation: Dec 2004
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Publication status: published as Blonigen, Bruce A. & Davies, Ronald B. & Waddell, Glen R. & Naughton, Helen T., 2007. "FDI in space: Spatial autoregressive relationships in foreign direct investment," European Economic Review, Elsevier, vol. 51(5), pages 1303-1325, July.
Handle: RePEc:nbr:nberwo:10939
Note: ITI
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