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Does FDI Promote Entrepreneurial Activities? A Meta-Analysis

Sanghyun Hong, W. Reed (), Bifei Tian, Tingting Wu and Gen Chen

Working Papers in Economics from University of Canterbury, Department of Economics and Finance

Abstract: This study uses meta-analysis to analyze 557 estimates from 35 studies that estimate the effect of inward FDI on entrepreneurial activity. We address two questions: (i) Does FDI lead to greater entrepreneurial activity in host countries? (ii) What factors are responsible for the different estimates across studies? In addressing these questions, we make two methodological contributions. We extend the new Andrews-Kasy meta-analysis estimators (Andrews & Kasy, 2019) to allow for explanatory variables, and we develop a nested framework of multiple meta-analysis models that allows for testing between models and model selection. We estimate that, across all studies, the average estimated effect of FDI on entrepreneurship is positive but small in size, and statistically insignificant. In contrast, the average effect from studies that control for endogeneity is negative and statistically significant.

Keywords: Meta-analysis; FDI; Entrepreneurship (search for similar items in EconPapers)
JEL-codes: L26 F21 C10 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cse, nep-ent and nep-int
Date: 2019-08-01
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http://www.econ.canterbury.ac.nz/RePEc/cbt/econwp/1906.pdf (application/pdf)

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Persistent link: https://EconPapers.repec.org/RePEc:cbt:econwp:19/06

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