 Which sectoral FDI flows crowd in domestic entrepreneurship?Nadia Doytch () Global Business and Economics Review, 2016, vol. 18, issue 2, 124-135 Abstract: This study examines the impact of several sector- and industry-level FDI inflows - mining, manufacturing, total services, and financial services - on domestic entrepreneurship, which is measured as the density of newly registered firms. We use a unique dataset of sectoral FDI coupled with data from the World Bank Doing Business Indicators for a panel of up to 96 countries and the period 2004-2012. Our model controls for fixed capital formation, quality of institutions, as well as several cost of doing business indicators: the cost of starting a business, tax rates, and export costs. We use a dynamic panel estimator that allows us to exploit the time-varying characteristics of the data and to control for omitted variable biases and endogeneity issues in the data. We find that although services and mining FDI are related to crowding-in of domestic entrepreneurship, manufacturing FDI is associated with a crowding-out effect. Keywords: foreign direct investment; FDI flows; domestic entrepreneurship; firm entry; sectoral FDI; mining industry; manufacturing industry; total services; financial services; fixed capital formation; institutional quality; startup costs; tax rates; export costs. (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:ids:gbusec:v:18:y:2016:i:2:p:124-135 Access Statistics for this article More articles in Global Business and Economics Review from Inderscience Enterprises Ltd |
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