Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/330995 
Year of Publication: 
2021
Citation: 
[Journal:] Research in Globalization [ISSN:] 2590-051X [Volume:] 3 [Article No.:] 100063 [Year:] 2021 [Pages:] 1-15
Publisher: 
Elsevier, Amsterdam
Abstract: 
While existing literature points to a positive impact of FDI on host countries' growth, little is known about how inward FDI contributes to economic volatility in the host country. In this paper, we investigate the FDI-output growth volatility nexus focusing on manufacturing sectors of OECD countries over the period 1990 to 2015. We document a positive and statistically significant relationship between inward FDI stock and sectoral output volatility. We also show that the impact of inward FDI stock in downstream activities on volatility is larger compared to that of inward FDI stock in upstream activities which is not significant. Additionally, we find that the positive relationship between FDI and volatility is stronger in high capital-intensive industries. These results are robust to the use of a measure of FDI targeting practices.
Subjects: 
Inward FDI
Volatility
FDI targeting
Spillover
OECD
Output growth
JEL: 
E32
F15
F36
O16
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by-nc-nd Logo
Document Type: 
Article

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