Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/121194
Authors: 
Falk, Martin
Hake, Mariya
Year of Publication: 
2008
Series/Report no.: 
FIW Research Reports 012
Abstract: 
The present paper investigates the link between exports and the outward FDI stock using a panel of industries and seven EU countries for the period 1973-2004. In particular, we use the panel causality tests developed by Holtz-Eakin, Newey, and Rosen (1988). Estimates using system GMM estimators show that exports cause FDI but not vice versa. The long-run elasticity of the outward FDI stock with respect to exports is 0.78 and highly significant. Separate estimates by destination country yields the same result that exports cause outward FDI but the effect is only significant for the CEE countries and other developed countries (i.e. United States, Japan, Canada, Switzerland, Norway, etc.).
Subjects: 
exports
FDI
dynamic panel data methods
JEL: 
F10
F21
Document Type: 
Research Report

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