Economics at your fingertips  

The impact of outbound foreign direct investment on export and private investment: Comparative analysis of emerging and developed countries

Syed Hasanat Shah and Waqar Ameer

Australian Economic Papers, 2021, vol. 60, issue 4, 674-692

Abstract: Outbound foreign direct investment (OFDI) was traditionally the realm of developed countries. However, recently OFDI originating from emerging countries has increased rapidly but hardly any study noticed its impact on the economic activities in emerging source countries. Therefore, this study explores the impact of OFDI on exports and private investment in emerging source countries by employing cross‐sectional dependence autoregressive distributed lag model. The findings in this paper suggest that OFDI contributes significantly to exports in the emerging countries both in the long and in the short run; however, OFDI contribution to private investment in emerging countries is limited to long run only. Moreover, the findings suggest that the positive impact of OFDI on exports and private investment in emerging countries requires quality institutions. The positive impact of OFDI on exports and private investment in emerging countries is low when compared with developed countries. However, the significant and high values of a dummy variable for the 2007–2008 financial crisis show that emerging countries are converging on developed countries in terms of gains from OFDI in post‐crisis era. We find that OFDI is an effective policy tool for emerging countries to diversify and kick start the local economy.

Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2) Track citations by RSS feed

Downloads: (external link)

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:

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=0004-900X

Access Statistics for this article

Australian Economic Papers is currently edited by Daniel Leonard

More articles in Australian Economic Papers from Wiley Blackwell
Bibliographic data for series maintained by Wiley Content Delivery ().

Page updated 2023-05-18
Handle: RePEc:bla:ausecp:v:60:y:2021:i:4:p:674-692