Transition to FDI openness
Subtitle: reconciling theory and evidence
By: Ellen R. McGrattan
Contributors: National Bureau of Economic Research
Series: NBER working paper series -- working paper 16774; Working paper series (National Bureau of Economic Research : Online) -- working paper no. 16774.
Publisher: National Bureau of Economic Research
Published: 2011
Place of publication: Cambridge, MA
Language: eng
Format: Electronic resource
Description: "Empirical studies quantifying the economic effects of increased foreign direct investment (FDI) have not provided conclusive evidence that they are positive, as theory predicts.  This paper shows that the lack of empirical evidence is consistent with theory if countries are in transition to FDI openness.  Anticipated welfare gains lead to temporary declines in domestic investment and employment.  Also, growth measures miss some intangible FDI, which is expensed from company profits.  The reconciliation of theory and evidence is accomplished with a multicountry dynamic general equilibrium model parameterized with data from a sample of 104 countries during 1980-2005.  Although no systematic benefits of FDI openness are found, the model demonstrates that the eventual gains in growth and welfare can be huge, especially for small countries"--National Bureau of Economic Research web site.
Notes: Title from PDF file as viewed on 5/10/2011.

Includes bibliographical references.

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