Kiel Working Papers, Kiel Institute for World Economics
No 1416:
Foreign Direct Investment, Competition and Industry Performance.
Jürgen Bitzer and Holger Görg
Abstract: Abstract: This paper investigates the productivity effects
of inward and outward foreign direct investment using industry and country
level data for 17 OECD countries over the period 1973 to 2001. Controlling
for national and international knowledge spillovers we argue that effects
of FDI work through direct compositional effects as well as changing
competition in the host country. 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
Keywords: Foreign direct investment, inward FDI, outward FDI, productivity, competition; (follow links to similar papers)
JEL-Codes: F23; (follow links to similar papers)
20 pages, April 2008
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