Measuring Efficiency externalities from Trade and Alternative Forms of Foreign Investment

Kris Iyer, Alicia Rambaldi () and Kam Ki Tang

No WP042005, CEPA Working Papers Series from University of Queensland, School of Economics

Abstract: The literature has concentrated on evaluating technological spillovers from trade and inflows of foreign direct investment (FDI). Little effort has been directed towards identifying efficiency externalities arising from international linkages. We evaluate these for a sample of 20 OECD countries between 1982 and 2000 using a stochastic frontier approach. The analysis includes trade, inflows and outflows of FDI, foreign portfolio investment (FPI), and other foreign investment (OFI), and a measure of the absorptive capacities of host economies. We find trade and all foreign investment inflows to lead to increased efficiency. Outflows of FDI are found to exacerbate inefficiency.

Date: 2005-06
New Economics Papers: this item is included in nep-eff, nep-fin, nep-ifn and nep-int
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:qld:uqcepa:16

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