Spain in the Investment Development Path

Posted: 22 Aug 1998

See all articles by José Manuel Campa

José Manuel Campa

University of Navarra - Madrid Campus - IESE Business School; National Bureau of Economic Research (NBER)

Mauro F. Guillen

University of Pennsylvania - Management Department


This chapter explores the ownership, locational and internalization advantages of outward and inward Spanish foreign direct investment (FDI) in order to test the predictions of the theory of the investment development path (IDP) in the case of a middle-income country. We first present the historical evolution of FDI since the mid-l9th century, discussing the interplay between economic and political factors. Focusing on the l986-l992 period, we conduct econometric analyses of the determinants of inward and outward FDI first by home/host country and then by industry. By country, we find the expected effects of income levels, R&D effort, trade intensity, and prior FDI history. Industry profitability, intangible assets, and revealed comparative advantage all predict higher FDI activity in an industry. Inward FDI confirms the IDP theory in its different aspects. Outward FDI also behaves as predicted, with most FDI activity going to countries with higher incomes. FDI to lower-income countries is mainly market-seeking while higher-income countries receive both asset-seeking and market-seeking Spanish FDI. In absolute terms, however, most Spanish created assets are exploited in countries with a higher income, and internalization advantages or government incentives to R&D advantages play a very limited role.

JEL Classification: E29

Suggested Citation

Campa, José Manuel and Guillen, Mauro Federico, Spain in the Investment Development Path. Available at SSRN:

José Manuel Campa (Contact Author)

University of Navarra - Madrid Campus - IESE Business School ( email )

Camino del Cerro del Aguila 3
Madrid, 28023
+34 91 357 0809 (Phone)
+34 91 357 2913 (Fax)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Mauro Federico Guillen

University of Pennsylvania - Management Department ( email )

The Wharton School
Philadelphia, PA 19104-6370
United States
215-573-6267 (Phone)
215-326-3205 (Fax)

Register to save articles to
your library


Paper statistics

Abstract Views
PlumX Metrics

Under construction: SSRN citations while be offline until July when we will launch a brand new and improved citations service, check here for more details.

For more information