2019
DOI: 10.1111/twec.12827
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A global analysis of factors impacting the intensive and extensive margins of bilateral foreign direct investment

Abstract: This study investigates determinants of bilateral foreign direct investment (FDI) on both margins, the extensive margin (whether to invest) and the intensive margin (how much to invest), based on the recent structural gravity model for FDI developed by Anderson et al. (Trade and investment in the global economy. National Bureau of Economic Research, Cambridge, MA, 2017). I examine a global data set comprised of 110 countries over 9 years, 2004–12. Apart from conventional gravity variables, the source country's… Show more

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Cited by 14 publications
(3 citation statements)
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“…This gives the highest number of observations reported by only one country in each pair. We do not combine both inward and outward data in each pair since there are significant inconsistencies between data reported by host and source countries, as scrutinised in Nguyen (2019). FDI data in current USD are converted to 2010 USD using the US' GDP deflator.…”
Section: Statistical Data and Empirical Methodologymentioning
confidence: 99%
See 1 more Smart Citation
“…This gives the highest number of observations reported by only one country in each pair. We do not combine both inward and outward data in each pair since there are significant inconsistencies between data reported by host and source countries, as scrutinised in Nguyen (2019). FDI data in current USD are converted to 2010 USD using the US' GDP deflator.…”
Section: Statistical Data and Empirical Methodologymentioning
confidence: 99%
“…These freedom indexes published by The Heritage Foundation. 4 Dummy variables for BITs are from Nguyen (2019), which are constructed from the UNCTAD database. 5 Distance and other dummy variables (common spoken language, colonial relationship) are taken from the CEPII database.…”
Section: Statistical Data and Empirical Methodologymentioning
confidence: 99%
“…Thus, following the gravity literature, we use country-pair fixed effects ij , capturing the linkages between RTAs and the error term (Yotov et al, 2016). 9 7 It is worth noting that recent literature emphasises the importance of distinguishing factors determining the extensive margin from those influencing the intensive margin particularly when the percentage of country-pairs with zero FDI flows is high (Anderson et al, 2019;Nguyen, 2019). In this specific context, the percentage of country-pairs with zero FDI flows is 61%.…”
Section: Empirical Model and Econometric Issuesmentioning
confidence: 99%