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A Panel Data Analysis on FDI and Exports


  • Martin Falk


  • Mariya Hake



The present paper investigates the link between exports and the outward FDI stock using a panel of industries and seven EU countries for the period 1973-2004. In particular, we use the panel causality tests developed by Holtz-Eakin, Newey, and Rosen (1988). Estimates using system GMM estimators show that exports cause FDI but not vice versa. The long-run elasticity of the outward FDI stock with respect to exports is 0.78 and highly significant. Separate estimates by destination country yields the same result that exports cause outward FDI but the effect is only significant for the CEE countries and other developed countries (i.e. United States, Japan, Canada, Switzerland, Norway, etc.).

Suggested Citation

  • Martin Falk & Mariya Hake, 2008. "A Panel Data Analysis on FDI and Exports," FIW Research Reports series I-012, FIW.
  • Handle: RePEc:wsr:ecbook:2008:i:i-012

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    References listed on IDEAS

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    Cited by:

    1. Lenuta CARP (CEKA), 2014. "Determinants Of Foreign Direct Investments In Romania," SEA - Practical Application of Science, Fundația Română pentru Inteligența Afacerii, Editorial Department, issue 5, pages 197-202, November.
    2. Miroslav Mateev & Iliya Tsekov, 2014. "Are there any top FDI performers among EU-15 and CEE countries? A comparative panel data analysis," Financial Theory and Practice, Institute of Public Finance, vol. 38(3), pages 337-374.
    3. Ferragina Anna Maria & Colacurcio Claudio, 2015. "Italian FDI and Exports at Sectoral Level: Substitutes or Complements?," Global Economy Journal, De Gruyter, vol. 15(2), pages 277-310, July.
    4. Chaido Dritsaki & Melina Dritsaki, 2012. "Exports and FDI: A Granger causality analysis in a heterogeneous panel," Economics Bulletin, AccessEcon, vol. 32(4), pages 3128-3139.

    More about this item


    exports; FDI; dynamic panel data methods;

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements


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