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The Role of Foreign and Domestic Investment in Promoting Exports and Imports. A Dynamic Panel Approach

Author

Listed:
  • Oana Cristina Popovici

    (Institute for Economic Forecasting, Romanian Academy)

  • Adrian Cantemir Calin

    (Institute for Economic Forecasting, Romanian Academy)

Abstract

The goal of this paper is to evaluate weather domestic or foreign investments are involved in the promotion of exports and imports in eight of the newest European Union member states. We apply the dynamic panel data model for identifying the determinants of both exports and imports in the period 1999-2013. Our main result point that there is a complementary relationship between FDI and both exports and imports. The EU membership is significant for the expansion of the trade activity, but is more relevant for the export activity than for the import one.

Suggested Citation

  • Oana Cristina Popovici & Adrian Cantemir Calin, 2017. "The Role of Foreign and Domestic Investment in Promoting Exports and Imports. A Dynamic Panel Approach," Working papers Globalization - Economic, Social and Moral Implications, April 2017 16, Research Association for Interdisciplinary Studies.
    • Handle: RePEc:smo:wpaper:16
    DOI: 10.5281/zenodo.581782
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    References listed on IDEAS

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    1. S. Blyde, Juan, 2003. "The Role of Foreign Direct Investment and Imports of Capital Goods in the North-South Diffusion of Technology," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 18, pages 545-562.
    2. Cheng Hsiao, 2007. "Panel data analysis—advantages and challenges," TEST: An Official Journal of the Spanish Society of Statistics and Operations Research, Springer;Sociedad de Estadística e Investigación Operativa, vol. 16(1), pages 1-22, May.
    3. M. T. Alguacil & V. Orts, 2003. "Inward Foreign Direct Investment and Imports in Spain," International Economic Journal, Taylor & Francis Journals, vol. 17(3), pages 19-38.
    4. Ping Zheng & Pamela Siler & Gianluigi Giorgioni, 2004. "FDI and the Export Performance of Chinese Indigenous Firms: a Regional Approach," Journal of Chinese Economic and Business Studies, Taylor & Francis Journals, vol. 2(1), pages 55-71.
    5. Ali M Kutan & Goran Vukšić, 2007. "Foreign Direct Investment and Export Performance: Empirical Evidence," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 49(3), pages 430-445, September.
    6. Penélope Pacheco‐López, 2005. "Foreign Direct Investment, Exports and Imports in Mexico," The World Economy, Wiley Blackwell, vol. 28(8), pages 1157-1172, August.
    7. Manuel Arellano & Stephen Bond, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 58(2), pages 277-297.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Bakari, Sayef & Khalfallah, Sirine & Zidi, Ahmed, 2021. "The Determinants of Agricultural Exports: Empirical Validation for the Case of Tunisia," International Journal of Food and Agricultural Economics (IJFAEC), Alanya Alaaddin Keykubat University, Department of Economics and Finance, vol. 9(3), October.

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    More about this item

    Keywords

    dynamic panel model; export; import; FDI; domestic investment;
    All these keywords.

    JEL classification:

    • C36 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Instrumental Variables (IV) Estimation
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements

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