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A Panel Analysis of the FDI Impact on International Trade

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Abstract

This paper examines the relationship between Foreign Direct Investment (FDI) and international trade. Specifically, the relationship between the stock of outward FDI, and inward FDI and Imports and Exports in the Portuguese economy. This paper also studies some technical problems associated with panel data have frequently been ignored in previous studies. The problems of serial and contemporaneous correlation have not been taken into account by a panel approach and, as we know, they can have an impact on estimates and statistical inferences. The results show that there exist a country-specific effect on the corrected panel data of heteroscedasticity and correltion and a complementary relationship between trade and inward stock of FDI.

Suggested Citation

  • Manuela Magalhães & Ana Paula Africano, 2007. "A Panel Analysis of the FDI Impact on International Trade," NIPE Working Papers 6/2007, NIPE - Universidade do Minho.
  • Handle: RePEc:nip:nipewp:6/2007
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    Cited by:

    1. Carmen Fillat Castejón & Joseph F. Francois & Julia Woerz, 2008. "Trade through FDI: investing in services," Documentos de Trabajo dt2008-06, Facultad de Ciencias Económicas y Empresariales, Universidad de Zaragoza.
    2. Gilroy B. Michael & Lukas Elmar & Heimann Christian, 2013. "Technologiestandort Deutschland und internationale Wissensspillover / Technology Site Germany and International Knowledge Spillovers: Welchen Einfluss nehmen ausländische MNU auf deutsche Exporte? / W," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 233(5-6), pages 575-599, October.
    3. Miguel Lebre de Freitas & Ricardo Paes Mamede, 2008. "Structural Transformation and the role of Foreign Direct Investment in Portugal: a descriptive analysis for the period 1990-2005," GEE Papers 0009, Gabinete de Estratégia e Estudos, Ministério da Economia, revised Dec 2008.
    4. Georgescu, George, 2012. "Fluxurile ISD in contextul crizei globale
      [The FDI flows under the global crisis effects]
      ," MPRA Paper 40842, University Library of Munich, Germany.
    5. Miguel Lebre de Freitas & Ricardo Paes Mamede, 2011. "Structural transformation of Portuguese exports and the role of foreign-owned firms: A descriptive analysis for the period 1995-2005," Notas Económicas, Faculty of Economics, University of Coimbra, issue 33, pages 20-43, June.
    6. B. Michael Gilroy & Elmar Lukas & Christian Heimann, 2010. "Welchen Einfluss hat die Anwesenheit von ausländischen und multinationalen Unternehmungen auf die deutschen Exporte?," Working Papers CIE 31, Paderborn University, CIE Center for International Economics.

    More about this item

    Keywords

    FDI; Trade; Gravity Analysis; Panel Data;

    JEL classification:

    • F1 - International Economics - - Trade
    • F4 - International Economics - - Macroeconomic Aspects of International Trade and Finance

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