Does Foreign Direct Investment Promote Economic Stability in Developing Countries?

Camilla Jensen

Publikation: Working paperForskning

Abstrakt

Does foreign direct investment aid or hinder economic recovery ensuing a financial crisis? The paper tests the hypothesis that foreign direct investors are less affected by volatility (uncertainty) on their investment decisions. The data comes from the Business Enterprise and Economic Performance Surveys (BEEPS) collected by the World Bank. The investment data is applied using a Q model specification and sales growth data using a simple SCP model. The main finding is that foreign held firms are different from domestically held firms and especially domestically export active firms because of lower adjustment cost (which makes them continue to invest) during episodes of uncertainty.
OriginalsprogEngelsk
UdgiverSSRN
Sider1-26
Antal sider26
DOI
StatusUdgivet - 29. nov. 2011
Udgivet eksterntJa
NavnThe University of Nottingham Research Papers

Emneord

  • Foreign direct investment
  • Volatility
  • Firm-level investment
  • Firm growth

Citationsformater

Jensen, C. (2011). Does Foreign Direct Investment Promote Economic Stability in Developing Countries? (s. 1-26). SSRN. The University of Nottingham Research Papers https://doi.org/10.2139/ssrn.1965968