Economics at your fingertips  

Institutions, Foreign Direct Investment, and Domestic Investment: Crowding Out or Crowding In?

Kristine Farla (), Denis de Crombrugghe and Bart Verspagen

World Development, 2016, vol. 88, issue C, 1-9

Abstract: Studies of the relationship between FDI and domestic investment reach contradictory findings. We argue that some of the conflicting evidence may be explained by the use of poor proxies for the theoretical concepts and questionable methodological choices. We review the paper of Morrissey and Udomkerdmonkol published in this journal in 2012. Improvements in the construction of the proxies and refinements in the estimation methodology reverse the finding of Morrissey and Udomkerdmonkol that FDI inflows crowd out domestic investment. Furthermore, there is no strong evidence that “good governance” actually encourages domestic investment.

Keywords: investment; FDI; governance; technology spillovers; rent seeking; developing countries (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (16) Track citations by RSS feed

Downloads: (external link)
Full text for ScienceDirect subscribers only

Related works:
Working Paper: Institutions, foreign direct investment, and domestic investment: crowding out or crowding in? (2013) Downloads
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:

Access Statistics for this article

World Development is currently edited by O. T. Coomes

More articles in World Development from Elsevier
Bibliographic data for series maintained by Dana Niculescu ().

Page updated 2019-10-09
Handle: RePEc:eee:wdevel:v:88:y:2016:i:c:p:1-9