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Foreign direct investment and domestic entrepreneurship: blessing or curse?

Estrin, Saul, Hülya Danakol, Seçil, Reynolds, Paul and Weitzel, Utz (2014) Foreign direct investment and domestic entrepreneurship: blessing or curse? CEP Discussion Papers (CEPDP1268). Centre for Economic Performance, London School of Economics and Political Science, London, UK.

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Abstract

This paper explores the effects of foreign direct investment, measured by mergers and acquisitions, on domestic entrepreneurial entry. We use a micro‐panel of more than two thousand individuals disaggregated by industry in seventy countries including both developed and developing economies, 2000-2009. The theory yields ambiguous predictions about the relationship between FDI and entrepreneurship; positive spillovers via dissemination of technology or negative because of crowding out. Our empirical analysis is conducted at three levels of aggregation. We find the relationship between FDI and domestic entrepreneurship in aggregate and intra-industry to be negative. Policies need to consider how to counteract this effect.

Item Type: Monograph (Discussion Paper)
Official URL: http://cep.lse.ac.uk/_new/publications/series.asp?...
Additional Information: © 2014 The Authors
Divisions: Management
Centre for Economic Performance
Subjects: H Social Sciences > HC Economic History and Conditions
H Social Sciences > HD Industries. Land use. Labor
H Social Sciences > HF Commerce
JEL classification: F - International Economics > F2 - International Factor Movements and International Business > F23 - Multinational Firms; International Business
L - Industrial Organization > L2 - Firm Objectives, Organization, and Behavior > L29 - Other
M - Business Administration and Business Economics; Marketing; Accounting > M1 - Business Administration > M13 - Entrepreneurship
Sets: Departments > Management
Collections > Economists Online
Research centres and groups > Centre for Economic Performance (CEP)
Research centres and groups > Managerial Economics and Strategy Group
Date Deposited: 26 Nov 2014 16:10
Last Modified: 05 Aug 2019 09:33
Funders: Economic and Social Research Council
URI: http://eprints.lse.ac.uk/id/eprint/60281

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