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FDI and Capital Formation in Developing Economies: New Evidence from Industry-level Data / Alessia A. Amighini, Margaret S. McMillan, Marco Sanfilippo.
- Format:
- Book
- Author/Creator:
- Amighini, Alessia.
- Series:
- Working Paper Series (National Bureau of Economic Research) no. w23049.
- NBER working paper series no. w23049
- Language:
- English
- Physical Description:
- 1 online resource: illustrations (black and white);
- Other Title:
- FDI and Capital Formation in Developing Economies
- Place of Publication:
- Cambridge, Mass. National Bureau of Economic Research 2017.
- Summary:
- We contribute to the long debated issue of whether inward foreign direct investment (FDI) can stimulate investment in developing countries by introducing a novel measure of FDI, based on industry-level data. Our results suggest a positive impact of FDI on total investment - measured as the ratio of gross fixed capital formation to GDP - but only if multinational enterprises engage in manufacturing production; the same does not hold for other business activities. Moreover, we find evidence of a more beneficial impact of foreign investors from advanced economies compared to developing ones. Our results are robust to alternative measures of FDI, as well as to instrumental variable approaches accounting for the potential endogeneity of FDI.
- Notes:
- Print version record
- January 2017.
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