DOI: 10.5281/zenodo.18155210
title: Replication Package for JDE
title: How Infrastructure and Institutions Shape the Productivity of Foreign Direct Investment:  Dynamic Panel Evidence from Emerging and Frontier Economies

description: This repository contains replication materials for the study of "How Infrastructure and Institutions Shape the Productivity of Foreign Direct Investment:Dynamic Panel Evidence from Emerging and Frontier Economies" 

Files include: -Cleaned data for JDE 

                      -Replication .do: Stata commands to reproduce all tables in the paper.

README.pdf: Paper Title: "How Infrastructure and Institutions Shape the Productivity of Foreign Direct Investment:Dynamic Panel Evidence from Emerging and Frontier Economies" 

Auther: Ernest Pele Botsyoe(Ghana Institute of Management and Public Administration)

DOI: 10.5281/zenode.18155210

Overview of the study

This study examines the heterogeneous productivity effects of foreign direct investment (FDI) on economic growth in emerging and frontier economies, emphasizing how these effects are conditioned by infrastructure and institutional quality. Drawing on a panel of Sub-Saharan Africa, Latin America, and Asia from 1970 to 2023, we employ dynamic heterogeneous panel estimators (PMG and DFE) to model interactions between FDI and key infrastructure dimensions—electricity access, mobile telecommunications, and logistics performance—while controlling for institutions and regional differences. Our findings reveal that FDI's long-run growth contributions are not automatic but depend critically on complementary infrastructure: electricity access consistently amplifies FDI impacts across regions, logistics performance is particularly salient in Latin America, and mobile telecommunications yield region-specific effects tied to absorptive capacity and FDI sectoral alignment. Baseline FDI effects are often weak or negative, underscoring structural contingencies. By integrating infrastructure-institution complementarities into a dynamic framework, this paper advances beyond additive models, explaining persistent FDI outcome heterogeneity in the Global South. Policy implications highlight the need for coordinated strategies that align FDI attraction with targeted infrastructure upgrades and institutional reforms to unlock foreign capital's growth potential.

Variables, Definitions, and Data Sources






Variable



Description



Data Source







gdpgp



Real GDP per capita growth (annual %)



World Bank, World Development Indicators (WDI)





fdi



Foreign direct investment inflows (% of GDP)



World Bank, WDI





ae



Access to electricity (% of population)



World Bank, WDI





mcs



Mobile cellular subscriptions (per 100 people)



World Bank, WDI





LPI



Logistics Performance Index (overall score, 1–5)



World Bank, LPI Database





gove



Government expenditure (% of GDP)



World Bank, WDI





gfcf



Gross fixed capital formation (% of GDP)



World Bank, WDI





tot



Terms of trade index (2010 = 100)



World Bank, WDI





popg

bm



Population growth (annual %)

Broad money (% of GDP)



World Bank, WDI

World Bank, WDI





Region



Regional classification: Sub-Saharan Africa, Latin America, Asia



Author-coded





 

Software package: Stata 19 MP

Commands:

a. xthreg

b. xtpmg

The annual secondary data, which was sourced from World Development Indicators, Polity 5 and other sources, have been uploaded to this platform for your use only for replication purposes. Identification is based on the full available country–time sample, rather than subsamples defined by regimes or thresholds, ensuring that the estimated long-run relationships are not driven by sample selection. The estimation outputs, Stata do.files and processed datasets used to generate the results have been uploaded.