Do countries' endowments of non-renewable energy resources matter for FDI attraction? A panel data analysis of 125 countries over the period 1995–2012

Teixeira, Aurora A.C.; Forte, Rosa; Assunção, Susana

doi:10.1016/j.inteco.2016.12.002

Cited by 24 publications

(11 citation statements)

References 42 publications

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“…This conclusion is validated by several studies e.g. [9, 10, 20, 21, 24, 33–36] and [37]. Yet, corruption is also seen as the “helping hand”, at least at the firm level and despite the negative aggregate outcome on growth (see [38–40]).…”

Section: Theoretical and Empirical Reviewsupporting

confidence: 57%

“…[14, 15, 20–26] while others find no evidence linking political risks to FDI e.g. [27–30] and [10]. However, [31] and [32] report a discrepant negative relationship between stability and FDI.…”

Section: Theoretical and Empirical Reviewmentioning

confidence: 99%

“…Research has identified both a positive e.g. [9, 10] and a negative e.g. [11, 12] relationship between FDI & natural-resource endowments.…”

Section: Introductionmentioning

confidence: 99%

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Foreign Direct Investment in oil-abundant countries: The role of institutions

2019

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The present work reassesses the impact of good governance and democracy on Foreign Direct Investment (FDI) in oil-abundant countries. To this end, we estimate the effect of host countries’ institutions on greenfield FDI, using a gravity equation for a dataset that covers 182 countries during 2003-2012. Our findings confirm that compliance to rule of law, lack of corruption, political stability and democracy could boost new FDI links through the extensive margin. Our results could not rule out the “oil curse”, meaning that oil producers attract fewer new greenfield projects than similar countries without oil. Unlike other studies, we show that the impact of institutions is not necessarily undermined by the presence of natural resources.

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Section: Theoretical and Empirical Reviewsupporting

confidence: 57%

Section: Theoretical and Empirical Reviewmentioning

confidence: 99%

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Foreign Direct Investment in oil-abundant countries: The role of institutions

2019

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“…The relationship between natural resources and FDI may also depend on the type of resources and the extent of resource dependence. In this respect, Teixeira et al (2017) argue that what matters is not the amount of 'proven reserves' of non-renewable resources but rather the share of these resources in total exports. They argue that countries with high resource dependence tend to attract more FDI, and that "resource-seeking FDI targets mainly economically shaky countries" (p. 66).…”

Section: Natural Resources and Fdimentioning

confidence: 99%

Capital flight, foreign direct investment and natural resources in Africa

Ndikumana

Sarr

2019

Resources Policy

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This paper provides theoretical and empirical insights into the puzzling simultaneous rise in foreign direct investment inflows in Africa and capital flight from the continent over the past decades. Indeed, paradoxically, even as African countries have become more attractive to foreign private capital, they have continued to experience capital exodus in the context of improved economic performance, especially since the turn of the century. This paper explores three questions. First, does foreign direct investment fuel capital flight as has been established in the case of external borrowing? In other words, is there an FDI-fueled capital flight phenomenon akin to debt-fueled capital flight? Second, is natural resource endowment a possible channel for the capital flight-FDI link, given that resource-rich countries tend to be both preferred destinations of FDI and prominent sources of capital flight? Third, does the quality of institutions mitigate the impact of natural resources on capital flight? The paper develops a theoretical model that conceptualizes these linkages and sets the stage for an econometric investigation of these questions. The results from econometric analysis based on a sample of 30 African countries over the period 1970-2015 show that FDI flows are positively related to capital flight, suggesting a possible FDI-fueled capital flight phenomenon. However, there is no evidence for an FDI overhang effect; past stock of FDI has no impact on capital flight. High natural resource rents are associated with high capital flight and the quality of institutions does not mitigate this link. The paper offers some policy insights derived from the empirical results.

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“…Similarly, results are not conclusive when countries' overall trade openness is considered. Indeed, there is a relevant strand of the literature which provides evidence indicating that trade openness fosters inward FDI (Aizenman & Noy, 2006;Asiedu, 2002;Botrić & Škuflić, 2006;Habib & Zurawicki, 2002;Martinez-Galan & Fontoura, 2019;Medvedev, 2012;Ramasamy & Yeung, 2010;Roman, Bengoa, & Sanchez-Robles, 2016;Teixeira, Forte, & Assuncao, 2017). On the other hand, there are studies which report a nonsignificant (Kolstad & Villanger, 2008;Vijayakumar, Sridharan, & Rao, 2010) or negative relationship (Wheeler & Mody, 1992).…”

Section: Literature Reviewmentioning

confidence: 99%

Mergers and acquisitions & trade: A global value chain analysis

Carril-Caccia

Pavlova

2019

World Economy

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The present paper deals with how the insertion in international trade and global value chains (GVCs) of countries affects their capacity of attracting foreign mergers and acquisitions (M&As). To this end, we combine data for bilateral M&As and trade in value added for the period 2001–15 and estimate an augmented gravity equation. Results indicate that trade openness per se does not favour M&As. Nevertheless, bilateral free trade agreements, heterogeneity of destinations (sources) for exports (imports) of intermediate and final goods, and position and participation in global value chains are relevant for explaining bilateral M&As. Moreover, their role is significantly different depending on the level of development of the home and host countries.

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Do countries' endowments of non-renewable energy resources matter for FDI attraction? A panel data analysis of 125 countries over the period 1995–2012

Cited by 24 publications

References 42 publications

Foreign Direct Investment in oil-abundant countries: The role of institutions

Foreign Direct Investment in oil-abundant countries: The role of institutions

Capital flight, foreign direct investment and natural resources in Africa

Mergers and acquisitions & trade: A global value chain analysis

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