The impact of foreign direct investment on host country exports: A meta‐analysis

Abstract

In this paper, we present a synthesis of the literature examining the impact of foreign direct investment on host country exports. We reviewed and summarised 37 theoretical papers, 27 micro‐level empirical studies and analysed 627 specifications from 117 macro‐level empirical studies. In exploring the reasons behind the variations of the reported effects in the empirical literature, we applied meta‐regression methodology. Our results indicate that the existing empirical literature generally reports a positive impact of foreign direct investment on exports, especially in developing countries. The reported effects are sensitive to research design, model specification and the context of the research. No publication bias was detected in the sampled studies. Based on our results, we provide some avenues and guidelines for future research on this topic. Our results could also have some important implications for policymakers.

Exporting decision of agricultural firms: The role of foreign direct investment

“…There is some evidence of aggregation bias in macro‐level studies, which analyze entire economies (Kastratović, 2020). To address this problem and to estimate the export effects of foreign direct investment more precisely, recent studies focused on individual sectors while maintaining a macro‐level empirical approach.…”

“…Yet, the results of empirical studies are somewhat inconclusive. Macro‐level studies, focusing on entire countries, for the most part, suggest a positive impact of foreign direct investment inflows on export (Kastratović, 2020). In contrast, the existing few macro‐level studies, which focus on agriculture, indicate insignificant effects (Djokoto, 2012; Khan et al, 2020).…”

Doğrudan Yabanci Yatirim Gi̇ri̇şleri̇ni̇n İhracat Üzeri̇ne Etki̇leri̇: G-20 Üyesi̇ Geli̇şmi̇ş Ve Geli̇şmekte Olan Ekonomi̇leri̇n Karşilaştirilmasi

“…Dolayısıyla sonuçlar, gelişmiş ekonomilerde doğrudan yabancı yatırım (DYY) girişlerinin ihracatı etkilemediğini, gelişmekte olan ekonomilerde ise, doğrudan yabancı yatırım girişlerinin ihracat üzerinde pozitif etkisi olduğunu göstermektedir. Bu bulgu, Brouthers vd., (1996)'ın çalışmasının ve Kastratović (2020)'in meta regresyon analizi ile ampirik literatürü özetleyen çalışmasının sonuçlarıyla paralellik göstermektedir. Sonuçlar, gelişmiş ülkelere yapılan DYY'lerin genelde yatay (iç pazar amaçlı) DYY olduğunu ve ihracatı etkilemediğini; gelişmekte olan ülkelere yapılan DYY'lerin ise genelde dikey (kaynak arayışı amaçlı) ve ihracat platformu DYY olduğunu ve ihracatı artırdığını göstermektedir.…”

Study of linkages between productivity, export, and outward foreign direct investment: An empirical perspective of Indian manufacturing industries

“…The theoretical literature decomposes the process of internationalization as the relationship between international trade (export) and FDI (outward FDI), where they may be either substitute or complementary (see Kastratović, 2020; Silva & Forte, 2018). The substitute relationship between these two shows that both trade and investment are two alternative modes of internationalization (Mundell, 1957; Vernon, 1966).…”