Business cycles and FDI: evidence from German sectoral data

Claudia Buch and Alexander Lipponer

No 2005,09, Discussion Paper Series 1: Economic Studies from Deutsche Bundesbank

Abstract: Globalization has effected business cycle developments in OECD countries and has increased activities of firms across national borders. This paper analyzes whether these two developments are linked. We use a new firm-level dataset on the foreign activities of German firms to test whether foreign activities are affected by business cycle developments. We aggregate the data by the sector of the reporting firm, the sector of the foreign affiliate, and the host country. Data are annual and cover the period 1989-2002. We find that German outward FDI increases in response to positive cyclical developments abroad and in response to a real depreciation of the domestic currency.

Keywords: Business cycles; multinational activity; FDI (search for similar items in EconPapers)
JEL-codes: E3 F23 (search for similar items in EconPapers)
Date: 2005
New Economics Papers: this item is included in nep-int and nep-mac
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Citations: View citations in EconPapers (17)

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Related works:
Journal Article: Business Cycles and FDI: Evidence from German Sectoral Data (2005)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:bubdp1:3369

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