The Positive Causal Impact of Foreign Direct Investment on Productivity: A Not So Typical Relationship

Rodolphe Desbordes and Vincenzo Verardi

No 1106, Working Papers from University of Strathclyde Business School, Department of Economics

Abstract: Previous research has argued that foreign direct investment (FDI) exerts a positive and causal impact on the productivity of the recipient countries. However, we find that there is little macroeconomic evidence that FDI fosters productivity growth in recipient countries, including in those with high absorptive capacity, once we use an instrumental variables (IV) estimator robust to outliers.

Keywords: Foreign Direct Investment; Productivity; Robust Regression. (search for similar items in EconPapers)
JEL-codes: C2 F2 O3 O4 (search for similar items in EconPapers)
Pages: 46 pages
Date: 2011-03
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Persistent link: https://EconPapers.repec.org/RePEc:str:wpaper:1106

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