Institutions, Foreign Direct Investment, and Domestic Investment: Crowding Out or Crowding In?

World Development

Volumn 88, Issue , 2016, Pages 1-9

  Farla, Kristine ^a,b   de Crombrugghe, Denis ^a   Verspagen, Bart ^b  

^a MAASTRICHT UNIVERSITY   (Netherlands)

^b UNU MERIT   (Netherlands)

Author keywords

developing countries; FDI; governance; investment; rent seeking; technology spillovers

Indexed keywords

CAPITAL FLOW; DEVELOPING WORLD; FOREIGN DIRECT INVESTMENT; INSTITUTIONAL FRAMEWORK; RENT SEEKING; SPILLOVER EFFECT;

EID: 84899780074     PISSN: 0305750X     EISSN: 18735991     Source Type: Journal    
DOI: 10.1016/j.worlddev.2014.04.008     Document Type: Article

References (34)

1. Adams, S., Foreign direct investment, domestic investment, and economic growth in Sub-Saharan Africa. Journal of Policy Modeling 31:6 (2009), 939–949.
2. Agosin, M., Machado, R., Foreign investment in developing countries: Does it crowd in domestic investment?. Oxford Development Studies 33:2 (2005), 149–162.
3. Agosin, M. R., & Mayer, R. (2000). Foreign investment in developing countries, does it crowd in domestic investment? UNCTAD discussion papers 146. United Nations Conference on Trade and Development.
4. Al-Sadig, A., The effects of foreign direct investment on private domestic investment: Evidence from developing countries. Empirical Economics 44:4 (2013), 1267–1275.
5. Amsden, A.H., Firm ownership and entepreneurship. Szirmai, A., Naudè, W., Goedhuys, M., (eds.) Entepreneurship, innovation, and economic development, 2011, Oxford University Press, 65–77.
6. Amsden, A. H. (2007). Nationality of firm ownership in developing countries: Who should “crowd out” whom in imperfect markets? In IDE-Jetro conference on economic development. Momigliano Lecture.
7. Apergis, N., Katrakilidis, C.P., Tabakis, N.M., Dynamic linkages between FDI inflows and domestic investment: A panel cointegration approach. Atlantic Economic Journal 34:4 (2006), 385–394.
8. Aw, B., Technology acquisition and development in Taiwan. Lall, S., Urata, S., (eds.) Competitiveness, FDI and technological activity in East Asia, 2003, Edward Elgar, Cheltenham, 168–190.
9. Blundell, R., Bond, S., Initial conditions and moment restrictions in dynamic panel data models. Journal of Econometrics 87:1 (1998), 115–143.
10. Borensztein, E., De Gregorio, J., Lee, J.-W., How does foreign direct investment affect economic growth?. Journal of International Economics 45:1 (1998), 115–135.
11. Bosworth, B.P., Collins, S.M., Capital flows to developing economies: Implications for saving and investment. Brookings Papers on Economic Activity 1999:1 (1999), 143–180.
12. Crespo, N., Fontoura, M.P., Determinant factors of FDI spillovers—What do we really know?. World Development 35:3 (2007), 410–425.
13. de Mello, L.R. Jr., Foreign direct investment-led growth: Evidence from time series and panel data. Oxford Economic Papers 51:1 (1999), 133–151.
14. Diaz-Cayeros, A., Entrenched insiders: Limited access order in Mexico. North, D.C., Wallis, J.J., Webb, S.B., Weingast, B.R., (eds.) In the shadow of violence: Politics, economics, and the problems of development, 2013, Cambridge University Press, 233–260.
15. Fu, X., Pietrobelli, C., Soete, L., The role of foreign technology and indigenous innovation in the emerging economies: Technological change and catching-up. World Development 39:7 (2011), 1204–1212.
16. Goto, A., Odagiri, H., Building technological capabilities with or without inward direct investment: The case of Japan. Lall, S., Urata, S., (eds.) Competitiveness, FDI and technological activity in East Asia, 2003, Edward Elgar, Cheltenham, 83–102.
17. Kaufmann, D., Kraay, A., & Mastruzzi, M. (2009). Governance matters VIII: Aggregate and individual governance indicators 1996–2008. Technical report. Washington, DC: World Bank Institute.
18. Kim, L., Imitation to innovation: The dynamics of Korea's technological learning. 1997, Harvard Business School Press, Harvard.
19. Kim, L., The dynamics of technology development: Lessons from the Korean experience. Lall, S., Urata, S., (eds.) Competitiveness, FDI and technological activity in East Asia, 2003, Edward Elgar, Cheltenham, 143–167.
20. Kosovà, R., Do foreign firms crowd out domestic firms? Evidence from the Czech Republic. The Review of Economics and Statistics 92:4 (2010), 861–881.
21. Lipsey, R. E. (2000). Interpreting developed countries’ foreign direct investment. NBER working papers 7810. National Bureau of Economic Research, Inc.
22. Misun, J., Tomsik, V., Does foreign direct investment crowd in or crowd out domestic investment?. Eastern European Economics, 40(2), 2002, 38.
23. Morrissey, O., Udomkerdmongkol, M., Governance, private investment and foreign direct investment in developing countries. World Development 40:3 (2012), 437–445.
24. Mutenyo, J., Asmah, E., Kalio, A., Does foreign direct investment crowd-out domestic private investment in Sub-Saharan Africa?. The African Finance Journal 12:1 (2010), 27–52.
25. Ndikumana, L., Verick, S., The linkages between FDI and domestic investment: Unravelling the developmental impact of foreign investment in Sub-Saharan Africa. Development Policy Review 26:6 (2008), 713–726.
26. Ramirez, M., Is foreign direct investment productive in the Latin America case? A panel co-integration analysis, 1980–2002. The International Trade Journal 25:1 (2011), 35–73.
27. Roodman, D., A note on the theme of too many instruments. Oxford Bulletin of Economics and Statistics 71:1 (2009), 135–158.
28. Roodman, D., How to do xtabond2: An introduction to difference and system GMM in Stata. Stata Journal 9:1 (2009), 86–136.
29. Tang, S., Selvanathan, E.A., Selvanathan, S., Foreign direct investment, domestic investment and economic growth in China: A time series analysis. World Economy 31:10 (2008), 1292–1309.
30. Titarenko, D. (2005). The influence of foreign direct investment on domestic investment processes in Latvia. MPRA paper 18192. University Library of Munich, Germany.
31. UNCTAD (2011). World investment report.
32. Windmeijer, F., A finite sample correction for the variance of linear efficient two-step GMM estimators. Journal of Econometrics 126:1 (2005), 25–51.
33. Wong, P., From using to creating technology: The evolution of Singapore's national innovation system and the changing role of public policy. Lall, S., Urata, S., (eds.) Competitiveness, FDI and technological Activity in East Asia, 2003, Edward Elgar, Cheltenham, 191–238.
34. Wooster, R., & Diebel, D. (2006). Productivity spillovers from foreign direct investment in developing countries: A metaregression analysis. Working paper available at SSRN.