FDI in Space: Spatial Autoregressive Relationships in Foreign Direct Investment
Bruce A. Blonigen
University of Oregon - Department of Economics; National Bureau of Economic Research (NBER)
Ronald B. Davies
University of Oregon - Department of Economics
Glen R. Waddell
University of Oregon - Department of Economics; Institute for the Study of Labor (IZA)
Helen Tammela Naughton
University of Montana - Department of Economics
NBER Working Paper No. w10939
Theoretical models of foreign direct investment (FDI) have only recently begun to model the role of third countries, and the empirical FDI literature has almost exclusively examined bilateral FDI data without recognizing the potential interdependence between FDI decisions to alternative host countries. This paper uses spatial econometric techniques to examine the spatial correlation between FDI to alternative (neighboring) regions. The sign of such correlations can provide evidence for or against alternative theories for FDI motivations. Using data on OECD countries from 1980-2000, we find evidence consistent with export platform FDI in Europe.
Number of Pages in PDF File: 32working papers series
Date posted: December 15, 2004
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