Original title: The impact of FDI on the host economy
Authors: Nikolovová, Pavla
Document type: Research reports
Year: 2011
Language: eng
Series: CERGE-EI discussion paper series, volume: 2011 - 212
Abstract: The volume of foreign direct investment (FDI) in CEE countries has been in- creasing in the past twenty years. It has generally been encouraged by domestic governments because the presence of a foreign rm is considered to have a strong potential to improve domestic economic conditions, among other the performance of domestic rms. Empirical studies of the actual impact of FDI on domestic rms, however, present rather ambiguous results. I argue that this is due to some limi- tations of prevalently used methodology, which does not separate the FDI spillover eects from the changes in competitive environment faced by domestic rms. In my research, I propose a novel estimation strategy that allows me to disentangle FDI spillovers from the eects of competition changing in response to the entry of a foreign rm. I consider this issue on the industry level and I compare the eects of FDI to the impact of international trade on the domestic economy. My identication strategy leads me to conrm the presence of positive spillovers stemming from FDI.
Keywords: CEE countries; foreign direct investment
Project no.: CEZ:AV0Z70850503 (CEP)

Institution: Economics Institute AS ČR (web)
Document availability information: Fulltext is available at the institute of the Academy of Sciences.
Original record: http://hdl.handle.net/11104/0204968

Permalink: http://www.nusl.cz/ntk/nusl-81255


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