Do multinationals beat down developing countries' export prices? The impact of FDI on net barter terms of trade

Konstantin Wacker

No 211, Ibero America Institute for Econ. Research (IAI) Discussion Papers from Ibero-America Institute for Economic Research

Abstract: This paper explores the economic relationship between foreign direct investment to developing countries and the export prices of the latter, measured by terms of trade. It is rst shown that economic theory suggests such a relationship for various reasons but is inconclusive about the direction of the e ect. To address this open issue empirically, I analyze data on more than 50 developing countries throughout the period 1980 - 2008 using dynamic panel data methods. The results show that multinational corporations, measured by data on foreign direct investment, had an economically relevant and statistically signi cant positive impact on developing countries' net barter terms of trade. A higher level of education in the developing country fosters this e ect.

Keywords: Multinationals; FDI; Terms of Trade; Prebisch-Singer hypothesis (search for similar items in EconPapers)
JEL-codes: C23 F23 O11 (search for similar items in EconPapers)
Pages: 25 pages
Date: 2011-08-19
New Economics Papers: this item is included in nep-dev, nep-hme and nep-int
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
http://www2.vwl.wiso.uni-goettingen.de/ibero/working_paper_neu/DB211.pdf (application/pdf)

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: https://EconPapers.repec.org/RePEc:got:iaidps:211

Access Statistics for this paper

More papers in Ibero America Institute for Econ. Research (IAI) Discussion Papers from Ibero-America Institute for Economic Research Contact information at EDIRC.
Bibliographic data for series maintained by Sabine Jaep ().