The Effects of Greenfield <scp>FDI</scp> and Cross‐border M&amp;As on Total Factor Productivity

Ashraf, Ayesha; Herzer, Dierk; Nunnenkamp, Peter

doi:10.1111/twec.12321

Cited by 88 publications

(67 citation statements)

References 94 publications

(149 reference statements)

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“…These studies can be divided into those that argue for positive [10,[24][25][26][27] and negative [28][29][30][31][32][33] effects. In particular, studies that claim negative effects explain that FDI induces a crowd-out effect, because it hinders the development of local economies [29].…”

Section: Literature Reviewmentioning

confidence: 99%

The Nexus of FDI, R&D, and Human Capital on Chinese Sustainable Development: Evidence from a Two-Step Approach

Park

2018

Sustainability

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This study examines the effect of the foreign direct investment (FDI)-human capital and R&D-human capital interactions (FDIHC and RDHHC) on Chinese development between 1991 and 2015. Based on endogenous growth theory, the study focuses on FDI, R&D, and human capital as important factors for sustained economic growth; the interactions among factors are set as the main variables affecting economic growth (GDP). In particular, this study attempts a two-step empirical analysis. First, data mining and semantic network analysis (SNA) are performed using variables as keywords; reliability and realism are reflected as variables. Second, using the vector error correction model (VECM), the study analyzes short and long run mutual influences between variables. The results show that, in data mining and SNA with FDI and R&D as keywords, words related to human capital show high frequency, centrality, and clustering. This finding implies that FDIHC and RDHHC have robustness as variables and can be used as interaction variables. According to the VECM results, FDIHC and RDHHC have positive influences on GDP in the short and long run. The results of a variance decomposition test show that RDHHC has strong mid-to long-run impacts on GDP, FDIHC, and R&D itself.

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Section: Literature Reviewmentioning

confidence: 99%

The Nexus of FDI, R&D, and Human Capital on Chinese Sustainable Development: Evidence from a Two-Step Approach

Park

2018

Sustainability

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“…Zhuang and Griffith (2013) also analyzed the impact of greenfield and brownfield FDI inflows on the inequality in 93 countries during the 1990-2009 period employing panel regression and found that greenfield FDI inflows positively affected the income inequality, while brownfield FDI inflows had no significant effects on the income inequality. On the other hand, Ashraf et al (2015) explored the influence of greenfield and brownfield FDIs on the productivity in 123 developed and developing states during the 2003-2011 period employing panel regression and revealed that brownfield FDIs positively affected total factor productivity, while greenfield FDI inflows made no significant contributions to the productivity. Furthermore, both greenfield and brownfield investments had no significant effects on the productivity in developing countries, while brownfield FDIs positively affected total factor productivity.…”

Section: Literature Reviewmentioning

confidence: 99%

Greenfield and Brownfield Investments and Economic Growth: Evidence from Central and Eastern European Union Countries

Bayar

2017

Naše Gospodarstvo/Our Economy

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Global foreign direct investment flows in terms of greenfield and brownfield investments have increased during the recent three decades resulting from the accelerating globalization. The considerable increases in the flows of foreign direct investment have many eventualities for the national economies. This study investigates the mutual effects among greenfield and brownfield (mergers and acquisitions) investments and economic growth in Central and Eastern European Union countries during the 2003-2015 period employing panel data analysis. The findings revealed that both greenfield and brownfield investments had positive influence on the economic growth, but the influence of greenfield investments was found to be relatively higher. Furthermore, one-way causality was discovered from both greenfield and brownfield investments to the economic growth.

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“…The economic rationale of this policy has already been questioned by Ashraf et al (2016), who do not find productivity enhancing effects of greenfield FDI in developed and developing host countries. The analysis in the present paper provides an additional reason for questioning the economic rationale of primarily promoting inflows of greenfield FDI since this type of FDI is associated with greater labour market volatility.…”

Section: Discussionmentioning

confidence: 99%

“…However, demand effects on government spending for social security would carry over to total government expenditures, unless the overall size of governments is 14 This is in sharp contrast to the positive productivity effects of M&As which Balsvik and Haller (2010) find for domestic plants in the same industry. Using a large sample of 123 developed and developing countries, Ashraf et al (2016) show that M&As increase total factor productivity in developed countries. However, greenfield FDI does not have any effect on total factor productivity in developed or developing countries.…”

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confidence: 99%

Greenfield FDI, cross-border M&As, and government size

Ashraf

Herzer

Nunnenkamp

2017

The Journal of International Trade & Economic Development

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. This study examines the effects of greenfield FDI and cross-border mergers and acquisitions (M&As) on government size in host countries of FDI. Using panel data for up to 130 countries for the period from 2003-2011, the study specifically tests the compensation hypothesis, suggesting that by increasing economic insecurity, economic openness leads to larger government size. It is found that greenfield FDI increases labour market volatility and thereby economic insecurity while M&As are not significantly associated with labour market volatility. The main results of this study are that greenfield FDI has a robust positive effect on government size, while M&As have no statistically significant effect on government size in the total sample of developed and developing countries, as well as in the sub-samples of developed and developing countries. Terms of use: Documents in EconStor may

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The Effects of Greenfield FDI and Cross‐border M&As on Total Factor Productivity

Cited by 88 publications

References 94 publications

The Nexus of FDI, R&D, and Human Capital on Chinese Sustainable Development: Evidence from a Two-Step Approach

The Nexus of FDI, R&D, and Human Capital on Chinese Sustainable Development: Evidence from a Two-Step Approach

Greenfield and Brownfield Investments and Economic Growth: Evidence from Central and Eastern European Union Countries

Greenfield FDI, cross-border M&As, and government size

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