Foreign Direct Investment and Domestic Entrepreneurship: Blessing or Curse?

Saul Estrin, Utz Weitzel, Danakol, Seçil Hülya and Paul Reynolds

No 9793, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: This paper explores the effects of foreign direct investment, measured by mergers and acquisitions, on domestic entrepreneurial entry. We use a micro-panel of more than two thousand individuals disaggregated by industry in seventy countries including both developed and developing economies, 2000-2009. The theory yields ambiguous predictions about the relationship between FDI and entrepreneurship; positive spillovers via dissemination of technology or negative because of crowding out. Our empirical analysis is conducted at three levels of aggregation. We find the relationship between FDI and domestic entrepreneurship in aggregate and intra-industry to be negative. Policies need to consider how to counteract this effect.

Keywords: entrepreneurship; Foreign direct investment; New firm entry; Spillovers (search for similar items in EconPapers)
JEL-codes: F23 L26 M13 (search for similar items in EconPapers)
Date: 2014-01
New Economics Papers: this item is included in nep-cse, nep-ent, nep-int and nep-sbm
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Citations: View citations in EconPapers (5)

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Related works:
Working Paper: Foreign Direct Investment and Domestic Entrepreneurship: Blessing or Curse? (2014)
Working Paper: Foreign direct investment and domestic entrepreneurship: blessing or curse? (2014)
Working Paper: Foreign Direct Investment and Domestic Entrepreneurship: Blessing or Curse? (2013)
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