The nexus between foreign direct investment and domestic private capital accumulation revalued: a cross-country assessment for 32 emerging markets
This study examines the impact of greenfield Foreign Direct Investment (FDI) on domestic private investment in 32 emerging economies from 1995 to 2021. Using conventional panel data methods —Ordinary Least Squares, and Fixed/Random effects models—, initial results suggest that FDI crowds in domestic...
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| Tipo de recurso: | artículo |
| Fecha de publicación: | 2026 |
| País: | España |
| Institución: | Universidad Complutense de Madrid (UCM) |
| Repositorio: | Docta Complutense |
| Idioma: | inglés |
| OAI Identifier: | oai:docta.ucm.es:20.500.14352/132869 |
| Acceso en línea: | https://hdl.handle.net/20.500.14352/132869 |
| Access Level: | acceso abierto |
| Palabra clave: | F21 E22 C33 O16 Foreing Direct Investment Domestic private capital accumulation Emerging countries Panel data Desarrollo económico Econometría (Economía) Economía internacional Estructura económica 5302 Econometría 5310 Economía Internacional |
| Sumario: | This study examines the impact of greenfield Foreign Direct Investment (FDI) on domestic private investment in 32 emerging economies from 1995 to 2021. Using conventional panel data methods —Ordinary Least Squares, and Fixed/Random effects models—, initial results suggest that FDI crowds in domestic investment. However, when addressing endogeneity and cross-sectional dependence through difference and system Generalized Method of Moments (GMM) estimators and augmented with Common Correlated Effects (CCE), FDI becomes statistically insignificant. Thus, the apparent positive effect disappears when robust methods are used, thereby highlighting that the FDI-investment nexus is highly sensitive to econometric methodology, particularly those that address endogeneity and cross-country interdependence. |
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