Understanding German FDI in Latin America and Asia: A comparison of GLM estimators

Artikel

The growth of Foreign Direct Investment (FDI) in developing countries over the last decade has attracted an intense academic and policy-oriented interest for its determinants. Despite the gravity model being considered a useful tool to approximate bilateral FDI flows, the literature has seen a growing debate in relation to its econometric specification, so that which is the best estimator for the gravity equation is far from conclusive. This paper examines the determinants of German outward FDI in Latin America and Asia for the period 1996-2012 by evaluating the performance of alternative Generalized Linear Model (GLM) estimators. Our findings indicate that Negative Binomial Pseudo Maximum Likelihood (NBPML) is the estimator best matched to our data, followed by Gamma Pseudo Maximum Likelihood (GPML). Furthermore, German FDI in Latin America is found to be predominantly vertical in nature, whereas that in Asia is mainly market-seeking.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Journal: Economies ; ISSN: 2227-7099 ; Volume: 8 ; Year: 2020 ; Issue: 1 ; Pages: 1-18 ; Basel: MDPI

Classification and Topics

• Classification: Wirtschaft ; International Investment; Long-term Capital Movements ; Multinational Firms; International Business ; Estimation: General ; Multiple or Simultaneous Equation Models: Panel Data Models; Spatio-temporal Models
• Subject: FDI determinants ; generalized linear models ; Germany ; gravity models ; outward foreign direct investment

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Camarero Olivas, Mariam ; Montolio, Laura ; Tamarit Escalona, Cecilio R.
• Event: Veröffentlichung
• (who): MDPI
• (where): Basel
• (when): 2020

Further information

• DOI: doi:10.3390/economies8010019
• Handle: http://hdl.handle.net/10419/257068
• Last update: 10.03.2025, 11:41 AM CET