The economic impact of inward FDI on the US

Theodore H. Moran, Lindsay Oldenski, 4 March 2014

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The US is the second-largest recipient of FDI in the world, behind China, and by far the largest target for FDI among OECD countries (OECD 2013). The numbers are large ($253 billion for the US), and the gap with the next-largest in the OECD is impressive ($63 billion for the UK and $62 billion for France in 2012).

Topics: Productivity and Innovation
Tags: FDI, multinationals, productivity, R&D, spillovers, US, wages

With a little help from my friends – FDI in Africa

Holger Görg, Christiane Krieger-Boden, Adnan Seric, 10 December 2013

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Foreign direct investment (FDI) and the emergence of multinational firms (MNEs) have proven successful strategies for the growth performance of host countries. In recent years, developing economies have gained substantial shares of such worldwide FDI flows. Now, a “new wave of FDI” has even swept sub-Saharan Africa, one of the poorest regions of the world (Figure 1).

Topics: Development, International trade
Tags: Africa, FDI

Is the negative impact of FDI real? Empirical evidence from Japan

Ayumu Tanaka, 20 November 2013

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The Japanese government is concerned about the so-called “hollowing out of manufacturing,” referring to the negative effects of FDI on domestic employment. A typical story is described below:

Topics: International trade
Tags: FDI, multinationals

Quid pro quo: Technology capital transfers for market access in China

Thomas Holmes, Ellen McGrattan, Edward C. Prescott, 8 November 2013

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Over the past two decades China’s economy has grown rapidly and the nation has become a major destination for foreign direct investment. Surprisingly, little of China's FDI inflows come from technologically advanced, dominant players in global investment such as the US, Europe, and Japan (Prasad and Wei 2007, Branstetter and Foley 2010).

Topics: Global economy, International trade
Tags: China, FDI, intellectual property rights, patents

Not all capital waves are alike: A sector-level examination of surges in FDI inflows

Dennis Reinhardt, Salvatore Dell'Erba, 8 July 2013

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Capital flows often come in waves. An extensive literature has documented 'surges' and 'bonanzas' in capital flows (e.g. Forbes and Warnock 2012, Reinhart and Reinhart 2009, Ghosh et al. 2012). While capital flows can bring many benefits the literature has also documented the risks associated with this cyclical nature.

Topics: International finance
Tags: capital flows, FDI, surges

How big are productivity gains from FDI?

Sebnem Kalemli-Ozcan, Christian Fons-Rosen, Bent E. Sørensen, Carolina Villegas-Sanchez, Vadym Volosovych, 4 June 2013

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During the decades of globalisation, flows of foreign direct investment (FDI) to both developed and emerging markets have surged in parallel with extensive policy momentum to increase FDI at the expense of debt as the major source of external financing.

This pro-FDI policy urge is justified by the perceived benefits of FDI on the host country. For example:

Topics: Development, International trade
Tags: FDI, productivity

Service-sector reforms enhance manufacturing productivity: Evidence from Indonesia

Victor Duggan, Sjamsu Rahardja, Gonzalo Varela, 22 May 2013

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Just as Cinderella was the forgotten sister with great potential, so service-sector foreign direct investment may be the neglected sibling of trade policy.

Topics: Development, Industrial organisation
Tags: FDI

Estimating the effect of the TPP on Japan’s growth

Yasuyuki Todo, 11 May 2013

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Prime Minister Abe recently announced that Japan would participate in the Trans-Pacific Partnership negotiations, with all other Trans-Pacific Partnership parties now having accepted Japan.1 This trade demarche is viewed as a key part of ‘Abenomics’ (Petri, Plummer and Zhai 2013). Although the dye has been cast, the debate in Japan has not ended.

Topics: International trade
Tags: FDI, foreign direct investment, Japan, TPP, Trans-Pacific Partnership

Fire-sale FDI: All smoke and no fire?

Ron Alquist, Linda Tesar, Rahul Mukherjee, 26 March 2013

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When times are bad, governments tend to welcome foreign direct investment, but they worry that they are selling the family silver for cheap. This ‘fire-sale FDI’ phenomenon, as Krugman called it in the 1990s, is a perennial concern of nations whose currencies have recently plummeted.

Topics: Development
Tags: FDI, fire-sale FDI, investment

New-paradigm globalisation and networked FDI: Evidence from Japan

Richard Baldwin, Toshihiro Okubo, 24 May 2012

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International trade theory is going through another revolution – the third in three decades.

Topics: International trade
Tags: FDI, globalisation, Japan

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