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The impact of FDI on industry performance

Author

Listed:
  • Jürgen Bitzer

    (Free University Berlin Department of Economics & Institute for East European Studies)

  • Holger Görg

    (Centre for Research on Globalisation & Economic Policy, School of Economics, University of Nottingham)

Abstract

This paper investigates the productivity effects of inward and outward foreign direct investment using industry and country level data for 17 OECD countries. The paper relates to a large recent literature on productivity spillovers from inward FDI, however, we also consider the relationship between productivity and outward FDI in the same estimation. Our results show that there are, on average, productivity benefits from inward FDI, although we can identify a number of countries which, on aggregate, do not appear to benefit in terms of productivity. On the other hand, a country's stock of outward FDI is, on average, negatively related to productivity. However, again there is substantial heterogeneity in the effect across OECD countries.

Suggested Citation

  • Jürgen Bitzer & Holger Görg, 2005. "The impact of FDI on industry performance," International Trade 0505003, University Library of Munich, Germany.
    • Handle: RePEc:wpa:wuwpit:0505003
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    Cited by:

    1. Nigel Driffield & James Love & Karl Taylor, 2008. "Productivity and Labour Demand Effects of Inward and Outward FDI on UK Industry," Working Papers 2008001, The University of Sheffield, Department of Economics, revised Jan 2008.
    2. Maryia Akulava, 2011. "The Impact of Foreign Direct Investment on Industrial Economic Growth in Belarus," BEROC Working Paper Series 11, Belarusian Economic Research and Outreach Center (BEROC).
    3. Priit Vahter & Jaan Masso, 2007. "Home versus Host Country Effects of FDI: Searching for New Evidence of Productivity Spillovers," Applied Economics Quarterly (formerly: Konjunkturpolitik), Duncker & Humblot, Berlin, vol. 53(2), pages 165-196.
    4. Opoku Adabor & Eric Fosu Oteng-Abayie & Emmanuel Buabeng, 2023. "The impact of foreign direct investment on the growth of the manufacturing sector: exploring the role of institutional quality in Ghana," SN Business & Economics, Springer, vol. 3(1), pages 1-25, January.
    5. Kun-Ming Chen & Shu-Fei Yang, 2013. "Impact of Outward Foreign Direct Investment on Domestic R&D Activity: Evidence from Taiwan's Multinational Enterprises in Low-wage Countries," Asian Economic Journal, East Asian Economic Association, vol. 27(1), pages 17-38, March.

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    More about this item

    Keywords

    Foreign direct investment; inward FDI; outward FDI; productivity; spillovers;
    All these keywords.

    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business

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