||[0.133]|[0.129]||
|---|---|---|---|
|Sector-specialized and dedicated staff|0.700|0.625|0.075|
||[0.153]|[0.125]||
|Investor-targeting campaigns for priority sectors|0.700|0.625|0.075|
||[0.153]|[0.125]||
|Communications and public relations campaigns|0.700<br>[0.153]|0.500<br>[0.129]|0.200|
|Relationship-building with existing investor communities|0.700|0.438|0.263|
||[0.153]|[0.128]||
|Website section for each priority sector|0.600<br>[0.163]|0.563<br>[0.128]|0.037|
|Purchase of sector intelligence/research reports|0.600<br>[0.163]|0.250<br>[0.112]|0.350*|
|Purchase of investor databases for the sector|0.300<br>[0.153]|0.250<br>[0.112]|0.050|
|**Tools and systems to facilitate operations**||||
|IPA has customer relationship management (CRM) software|1.000<br>[0.000]|1.000<br>[0.000]|N/A|
|IPA’s CRM software is ‘mostly’ or ‘fully’ used by its staff|0.900<br>[0.100]|0.688<br>[0.120]|0.212|
|IPA has a system for gathering investor complaints or disputes|0.800<br>[0.133]|0.438<br>[0.128]|0.362*|
|IPA has standard operating procedures for investor queries, aftercare.|0.700<br>[0.153]|0.688<br>[0.120]|0.013|
|IPA has shared information system cataloging general and sectoral||||
|data and information for use by investors|0.600<br>[0.163]|0.688<br>[0.120]|-0.087|
|**IPA has electronic database with updated contact information**||||
|Database containing current foreign investors|0.900<br>[0.100]|0.938<br>[0.063]|-0.037|
|Database containing potential foreign investors|0.800<br>[0.133]|0.688<br>[0.120]|0.113|
|Database containing domestic supplier firms|0.400<br>[0.163]|0.500<br>[0.129]|-0.100|
|Database containing available local joint venture partners|0.200|0.188|0.013|
||[0.133]|[0.101]||

Note: The value displayed for t-tests are the differences in the means across the groups. High-performing IPAs are identified based on the sectoral gravity model with country interaction effects (see section 4.1). IPA = Investment Promotion Agency. CRM = Customer relationship management. Green-highlighted fields indicate statistically significant differences between highperforming IPAs and other IPAs. ***, **, and * indicate significance at the 1, 5, and 10 percent critical level.

# **6. Conclusion**

This paper brings together new data and analysis on sectoral FDI and IPA characteristics to analyze what characteristics make IPAs more or less effective in attracting foreign direct investment (FDI) into their home country. It does so by first creating a new data set on bilateral, sectoral FDI positions, using data from the US Bureau of Economic Analysis (BEA) and EUROSTAT’s BPM6 database for the years 2013 to 2018. This is combined with a recent WB-WAIPA survey to explore the effect of IPA sectoral targeting on inward FDI stocks for a sample of 36 middle- and high-income countries around the world.

Using a structural gravity model framework, the study finds that IPA sectoral targeting generally provides a significant positive effect on the sector’s FDI stock in that country. The most conversative, and preferred, estimate is from a PPML model that includes country-pair fixed effects, source-, host-, and sector-year fixed effects, and host-sector fixed effects. This suggests that an IPA’s targeting of a specific sector is 23