Arbeitspapier
Into the allocation puzzle: A sectoral analysis
This paper assesses whether the allocation puzzle - the tendency for capital to flow to countries with relatively low productivity growth - is observed for foreign direct investment (FDI) flows, which should be particularly sensitive to productivity prospects. We look both at aggregate FDI flows and, using a new data set, at FDI flows into the main economic sectors. We make three points. First, we do not find evidence of an allocation puzzle for aggregate FDI flows. Second, we refine the aggregate result and document substantial sectoral heterogeneity. An allocation puzzle is observed in the agriculture, construction, mining/petroleum/utilities and tourism sector. By contrast, we show that countries with faster productivity growth in manufacturing attract more investment in that sector. The link is even stronger for service sectors. Third, we document a role for financial openness: a country with fast productivity growth draws in more FDI into its service sectors only when it is financially open. We conclude with a discussion of some tentative explanations for the results.
- Sprache
-
Englisch
- Erschienen in
-
Series: Graduate Institute of International and Development Studies Working Paper ; No. 14/2010
- Klassifikation
-
Wirtschaft
International Investment; Long-term Capital Movements
Open Economy Macroeconomics
- Thema
-
Allocation Puzzle
Sectoral Level
Foreign Direct Investment
Kapitalmobilität
Direktinvestition
Produktivität
Standortwettbewerb
Schätzung
Welt
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Reinhardt, Dennis
- Ereignis
-
Veröffentlichung
- (wer)
-
Graduate Institute of International and Development Studies
- (wo)
-
Geneva
- (wann)
-
2010
- Handle
- Letzte Aktualisierung
-
10.03.2025, 11:43 MEZ
Datenpartner
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.
Objekttyp
- Arbeitspapier
Beteiligte
- Reinhardt, Dennis
- Graduate Institute of International and Development Studies
Entstanden
- 2010
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