FDI Promotion Policy and Comparative Advantage
28 November 2013 4:00 pm CET
Beata Smarzynska Javorcik
University of Oxford, CEPR, CESifo
In cooperation with:
Venue
wiiw, Rahlgasse 3, 1060 Vienna, lecture hall (library (2nd floor))
Description
Can industrial policy affect the country’s comparative advantage? This study argues that FDI promotion policy is an effective way of shaping the national export structure. We combine product-specific revealed comparative advantage (RCA) indicators with time-varying information on sectors receiving priority status in national FDI promotion efforts during the period 1984-2006. We find a positive and statistically significant relationship between investment promotion efforts and RCA in developing countries. The new Exporter Dynamics Database from the World Bank allows us to further analyse the effects of investment promotion polices across the distribution of firms. The results show that investment promotion efforts are associated with higher values of exports across the distribution of exporters. They also appear to be positively correlated with the firms’ export values, regardless of their initial size in foreign markets, and with the number of export destinations
This seminar series is an activity in the framework of FIW ('Forschungsschwerpunkt Internationale Wirtschaft'), which is a project designed to build a center of excellence in research on International Economics, funded by the Austrian Ministry of Economics, Family and Youth..
The seminar programme is regularly updated. Please visit our website for the current version of the programme at:
http://wiiw.ac.at/fiw-wiiw-seminars-in-international-economics-es-6.html
http://www.fiw.ac.at/index.php?id=748
Keywords: FDI promotion, RCA, exports promotion
JEL classification: F10, F14, F23, F68