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Panel analysis of the FDI impact on international trade revisited

Author

Listed:
  • Manuela Magalhães

    (Faculdade de Economia da Universidade do Porto e CEF.UP)

  • Ana Paula Africano

    (Faculdade de Economia da Universidade do Porto e CEF.UP)

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 that have frequently been ignored in previ-ous studies. And the problems of serial and contemp oraneous correlation in particular can have a sizeable impact on estimates and statistical inferences. Our results show that there exist country -specific and time effects on the corrected panel data of heteroscedasticity and correlation and a substitutability relationship between imports and outward stock of FDI over the period 2000-2013.

Suggested Citation

  • Manuela Magalhães & Ana Paula Africano, 2017. "Panel analysis of the FDI impact on international trade revisited," Notas Económicas, Faculty of Economics, University of Coimbra, issue 45, pages 49-64, December.
    • Handle: RePEc:gmf:journl:y:2017:i:44:p:49:64
    DOI: 10.14195/2183-203X_45_3
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    More about this item

    Keywords

    FDI; trade; gravity analysis; panel data.;
    All these keywords.

    JEL classification:

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

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