TY - JOUR
T1 - The impact of foreign direct investment on horizontal export diversification
T2 - Empirical evidence
AU - Tadesse, Bedassa
AU - Shukralla, Elias K.
PY - 2013/1
Y1 - 2013/1
N2 - Using data on stocks of Foreign Direct Investment (FDI) from 131 countries spanning the years 1984 to 2004 and the number of products exported by each country, we examine the effect of FDI on horizontal export diversification. To quantify the effects, we utilize parametric (quantile) and semi-parametric econometric methods. Results from both approaches indicate that, in general, an increase in the stock of FDI enhances the horizontal diversification of exports. The actual magnitude of the effect however, varies greatly across countries depending on the existing stock of FDI and stage of diversification, giving rise to an almost inverted U-shaped relationship. A further look at our results provides useful insights on the circumstances under which FDI may aid or inhibit the horizontal expansion of exports.
AB - Using data on stocks of Foreign Direct Investment (FDI) from 131 countries spanning the years 1984 to 2004 and the number of products exported by each country, we examine the effect of FDI on horizontal export diversification. To quantify the effects, we utilize parametric (quantile) and semi-parametric econometric methods. Results from both approaches indicate that, in general, an increase in the stock of FDI enhances the horizontal diversification of exports. The actual magnitude of the effect however, varies greatly across countries depending on the existing stock of FDI and stage of diversification, giving rise to an almost inverted U-shaped relationship. A further look at our results provides useful insights on the circumstances under which FDI may aid or inhibit the horizontal expansion of exports.
KW - Export diversification
KW - Foreign direct investment
KW - Nonparametric estimation
KW - Quantile regression
UR - http://www.scopus.com/inward/record.url?scp=80052826923&partnerID=8YFLogxK
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U2 - 10.1080/00036846.2011.595692
DO - 10.1080/00036846.2011.595692
M3 - Article
AN - SCOPUS:80052826923
SN - 0003-6846
VL - 45
SP - 141
EP - 159
JO - Applied Economics
JF - Applied Economics
IS - 2
ER -