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How global is FDI? Evidence from the analysis of Theil indices

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  • Bickenbach, Frank
  • Liu, Wan-Hsin
  • Nunnenkamp, Peter

Abstract

It is open to question whether the intensified worldwide competition for FDI has reduced its traditionally strong concentration in a few large and relatively advanced host countries. We calculate and decompose Theil indices to track changes in absolute and relative concentration of FDI during the period 1970-2013. We find that both absolute and relative concentration decreased when excluding offshore financial centers from the overall sample. In addition to the narrowing gap between OECD and non-OECD countries, the concentration across non-OECD countries declined - for major subgroups and for both the absolute and relative measures. Finally, recent developments indicate that low-income countries are no longer at the losing end of the competition for FDI.

Suggested Citation

  • Bickenbach, Frank & Liu, Wan-Hsin & Nunnenkamp, Peter, 2015. "How global is FDI? Evidence from the analysis of Theil indices," Kiel Working Papers 2015, Kiel Institute for the World Economy (IfW Kiel).
    • Handle: RePEc:zbw:ifwkwp:2015
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    References listed on IDEAS

    as
    1. Frank Bickenbach & Wan-Hsin Liu & Peter Nunnenkamp, 2015. "Regional concentration of FDI in post-reform India: A district-level analysis," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 24(5), pages 660-695, August.
    2. Peter Nunnenkamp & Rainer Thiele, 2013. "Financing for Development: The Gap between Words and Deeds since Monterrey," Development Policy Review, Overseas Development Institute, vol. 31(1), pages 75-98, January.
    3. Olivier Cadot & Céline Carrère & Vanessa Strauss-Kahn, 2013. "Trade Diversification, Income, And Growth: What Do We Know?," Journal of Economic Surveys, Wiley Blackwell, vol. 27(4), pages 790-812, September.
    4. Stiglitz, Joseph E., 2000. "Capital Market Liberalization, Economic Growth, and Instability," World Development, Elsevier, vol. 28(6), pages 1075-1086, June.
    5. Frank Bickenbach & Eckhardt Bode, 2008. "Disproportionality Measures of Concentration, Specialization, and Localization," International Regional Science Review, , vol. 31(4), pages 359-388, October.
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    1. Alfred A. Haug & Anh T. N. Nguyen & P. Dorian Owen, 2023. "Do the determinants of foreign direct investment have a reverse and symmetric impact on foreign direct divestment?," Empirical Economics, Springer, vol. 64(2), pages 659-680, February.
    2. Okafor, Luke Emeka & Hassan, M. Kabir & Rashid, Mamunur & Prabu, Darniya & Sabit, Ahmed, 2022. "Risk dimensions, risk clusters, and foreign direct investments in developing countries," International Review of Economics & Finance, Elsevier, vol. 82(C), pages 636-649.
    3. Mori Kogid & Jaratin Lily & Rozilee Asid & James M. Alin & Dullah Mulok, 2022. "Volatility spillover and dynamic co-movement of foreign direct investment between Malaysia and China and developed countries," Quality & Quantity: International Journal of Methodology, Springer, vol. 56(1), pages 131-148, February.
    4. Daxin Dong, 2021. "The impact of financial openness on public debt in developing countries," Empirical Economics, Springer, vol. 60(5), pages 2261-2291, May.
    5. Bickenbach, Frank & Mbelu, Asithandile & Nunnenkamp, Peter, 2019. "Is foreign aid concentrated increasingly on needy and deserving recipient countries? An analysis of Theil indices, 1995–2015," World Development, Elsevier, vol. 115(C), pages 1-16.
    6. Görlich, Dennis & Hanley, Aoife & Liu, Wan-Hsin & Semrau, Finn Ole, 2020. "Fostering the development of the coffee global value chain," Kiel Working Papers 2170, Kiel Institute for the World Economy (IfW Kiel).

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    More about this item

    Keywords

    foreign direct investment; concentration; Theil decomposition;
    All these keywords.

    JEL classification:

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

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