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European Instiute of Japanese Studies, Stockholm School of Economics EIJS Working Papers Series

No 192:
HOST COUNTRY IMPACTS OF INWARD FDI: WHY SUCH DIFFERENT ANSWERS?

Robert Lipsey and Fredrik Sjöholm ()

Abstract: A substantial literature has grown up around the issue of how inward direct investment affects host countries. On almost every aspect of this question, there seems to be a wide range of empirical results in academic literature, and little sign of convergence. It is our purpose here to try to understand why contradictory results seem to be found by different investigators. Is it that the statistical techniques are different? Or are the countries they examine different? Or are they asking different questions under the same labels of wages, productivity, or spillovers? We try to answer these questions in two ways. One is to review the individual studies themselves to clarify the questions asked and the data used. The other is to survey studies on data for Indonesia, which cover a long period and are detailed and accessible, to test the implications of different definitions and methods.

Keywords: FDI; Wages; Productivity; Spillovers; (follow links to similar papers)

JEL-Codes: F23; J31; O12; (follow links to similar papers)

34 pages, May 17, 2004

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This paper is published as:
Lipsey, Robert and Fredrik Sjöholm, (2005), 'HOST COUNTRY IMPACTS OF INWARD FDI: WHY SUCH DIFFERENT ANSWERS?' in Moran, Theodore, Edward Graham and Magnus Blomström (eds.) Does Foreign Direct Investment Promote Development, chapter 2, pages 23-44, Intstitute for International Economics.



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