Quantile regression for the FDI gravity equation

Jordi Paniagua (), Erik Figueiredo and Juan Sapena

Journal of Business Research, 2015, vol. 68, issue 7, 1512-1518

Abstract: Firm-level heterogeneity shapes foreign direct investment (FDI) flows, whereby a few firms are responsible for most of the world's FDI. Aggregate outcomes of FDI are highly skewed, and the estimates of FDI's antecedents vary largely depending on FDI level. The incidence of individual firms, however, varies across FDI's quantiles. To study the individual firms' effect on FDI flows, this study develops a quantile regression method for bilateral FDI panel data. This study estimates the differential incidence of individual firm-level projects on aggregate flows among 161 countries from 2003 to 2012. Results suggest that FDI's determinants vary across quantiles. In particular, the effect of individual projects on FDI flows increases in the upper quantiles. Policymakers may use this insight to target polices on the few to benefit the many.

Keywords: Foreign direct investment; Extensive margin; Gravity equation; Quantile regression; Firm-level heterogeneity (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (21)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0148296315000570
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:jbrese:v:68:y:2015:i:7:p:1512-1518

DOI: 10.1016/j.jbusres.2015.01.043

Access Statistics for this article

Journal of Business Research is currently edited by A. G. Woodside

More articles in Journal of Business Research from Elsevier
Bibliographic data for series maintained by Catherine Liu ().