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Foreign direct investment and entrepreneurship: gender differences across international economic freedom and taxation

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  • Rajeev K. Goel

    (Kiel Institute for the World Economy
    Illinois State University)

Abstract

Using recent cross-national data, this paper examines the impact of foreign direct investment (FDI) on entrepreneurship activity. The impact of FDI on entrepreneurship is not clear a priori, with possibilities of both a negative effect (crowding out) and a positive effect (synergy or complementarity via spillovers). Results find support for the crowding out effect; however, this effect varies across nations with different prevalence of entrepreneurship. Another focus of this work is on gender differences. The crowding out effect is stronger for the full sample rather than the subsample of female entrepreneurship. This finding stands up to a battery of robustness checks. Policy implications are discussed.

Suggested Citation

  • Rajeev K. Goel, 2018. "Foreign direct investment and entrepreneurship: gender differences across international economic freedom and taxation," Small Business Economics, Springer, vol. 50(4), pages 887-897, April.
    • Handle: RePEc:kap:sbusec:v:50:y:2018:i:4:d:10.1007_s11187-017-9914-2
    DOI: 10.1007/s11187-017-9914-2
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    12. Rajeev Goel & James Saunoris & Xingyuan Zhang, 2015. "Innovation and underground entrepreneurship," The Journal of Technology Transfer, Springer, vol. 40(5), pages 800-820, October.
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    19. Szerb, László & Aidis, Ruta & Acs, Zoltan J., 2013. "The Comparison of the Global Entrepreneurship Monitor and the Global Entrepreneurship and Development Index Methodologies," Foundations and Trends(R) in Entrepreneurship, now publishers, vol. 9(1), pages 1-142, January.
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    22. Rajeev K. Goel & Edward W.T. Hsieh, 2002. "Internet Growth and Economic Theory," Netnomics, Springer, vol. 4(2), pages 221-225, November.
    23. Paula Stephan & Asmaa El-Ganainy, 2007. "The entrepreneurial puzzle: explaining the gender gap," The Journal of Technology Transfer, Springer, vol. 32(5), pages 475-487, October.
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    Cited by:

    1. Hong, Sanghyun & Robert Reed, W. & Tian, Bifei & Wu, Tingting & Chen, Gen, 2021. "Does FDI promote entrepreneurial activities? A meta-analysis," World Development, Elsevier, vol. 142(C).
    2. Marc Audi & Marc Poulin & Amjad Ali, 2024. "Determinants of Business Freedom in Developing Countries: The Role of Institutional Development and Policy Mix," International Journal of Economics and Financial Issues, Econjournals, vol. 14(4), pages 188-199, July.
    3. Piers Thompson & Wenyu Zang, 2022. "A matter of life and death? Knowledge intensity of FDI activities and domestic enterprise," Papers in Regional Science, Wiley Blackwell, vol. 101(5), pages 1157-1179, October.
    4. Tung Son Ha & Vu Tuan Chu & Mai Tuyet Thi Nguyen & Dung Hoai Thi Nguyen & Anh Ngoc Thi Nguyen, 2021. "The impact of Greenfield investment on domestic entrepreneurship," Journal of Innovation and Entrepreneurship, Springer, vol. 10(1), pages 1-16, December.
    5. Sheng Fang & Dean Xu & Lixin Colin Xu & Heba Shams, 2023. "Does FDI have a social demonstration effect in developing economies? Evidence based on the presence of women-led local firms," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 54(7), pages 1332-1350, September.
    6. Seema Singha & Soma Roy Dey Choudhury & Brajesh Kumar, 2022. "Foreign direct investments and spillover effect on entrepreneurial activities in India: an empirical study," Journal of Global Entrepreneurship Research, Springer;UNESCO Chair in Entrepreneurship, vol. 12(1), pages 423-439, December.
    7. Aparicio, Sebastian & Audretsch, David & Noguera, Maria & Urbano, David, 2022. "Can female entrepreneurs boost social mobility in developing countries? An institutional analysis," Technological Forecasting and Social Change, Elsevier, vol. 175(C).
    8. Slesman, Ly & Abubakar, Yazid Abdullahi & Mitra, Jay, 2021. "Foreign direct investment and entrepreneurship: Does the role of institutions matter?," International Business Review, Elsevier, vol. 30(4).
    9. Rajeev K. Goel & James W. Saunoris, 2020. "Does income inequality sand or grease the wheels of entrepreneurial activity? International evidence," Australian Economic Papers, Wiley Blackwell, vol. 59(2), pages 138-160, June.
    10. Akter, Mansura & Akter, Shahriar & Rahman, Mahfuzur & Priporas, Constantinos Vasilios, 2023. "Mapping the barriers to socio-economic freedom in internationalisation of women-owned SMEs: Evidence from a developing country," Journal of International Management, Elsevier, vol. 29(6).
    11. Rajeev K. Goel & Michael A. Nelson, 2023. "Which political regimes foster entrepreneurship? An international examination," The Journal of Technology Transfer, Springer, vol. 48(1), pages 126-146, February.
    12. Marzieh Abolhassani & Seçil Hülya Danakol, 2019. "Wage and competition channels of foreign direct investment and new firm entry," Small Business Economics, Springer, vol. 53(4), pages 935-960, December.
    13. David B. Audretsch & Antje Fiedler, 2023. "Does the entrepreneurial state crowd out entrepreneurship?," Small Business Economics, Springer, vol. 60(2), pages 573-589, February.
    14. Rajeev K. Goel & Michael A. Nelson, 2020. "Presidential Versus Parliamentary Systems: Where Do Female Entrepreneurs Thrive?," Social Science Quarterly, Southwestern Social Science Association, vol. 101(5), pages 1773-1788, September.
    15. Rajeev K. Goel & James W. Saunoris, 2022. "Foreign direct investment (FDI): friend or foe of non-innovating firms?," The Journal of Technology Transfer, Springer, vol. 47(4), pages 1162-1178, August.

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    More about this item

    Keywords

    Entrepreneurship; Gender; Foreign direct investment; Taxation; Economic freedom;
    All these keywords.

    JEL classification:

    • M16 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - International Business Administration
    • F6 - International Economics - - Economic Impacts of Globalization

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