NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

NBER Publications by Helen Naughton

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Working Papers and Chapters

July 2005Spacey Parents: Spatial Autoregressive Patterns in Inbound FDI
with Bruce A. Blonigen, Ronald B. Davies, Glen R. Waddell: w11466
Increasing attention has been given to the impact of third countries on outbound FDI to a given host country. Here, we consider potential third-country effects on inbound FDI. A simple model suggests two sources of such effects on a country's inbound FDI. First, it will tend to receive more FDI fromparent countries proximate to large third countries. Second, FDI from third countries may increase or decrease FDI from the parent country in question depending on whether production spillovers or crowding out effects dominate. Using data on US inbound FDI from OECD countries during 1980-2000, we find strong evidence for parent market proximity effects. We find robust results for third country FDI effects only in a European subsample. There, crowding out effects dominate.
December 2004FDI in Space: Spatial Autoregressive Relationships in Foreign Direct Investment
with Bruce A. Blonigen, Ronald B. Davies, Glen R. Waddell: w10939
Theoretical models of foreign direct investment (FDI) have only recently begun to model the role of third countries, and the empirical FDI literature has almost exclusively examined bilateral FDI data without recognizing the potential interdependence between FDI decisions to alternative host countries. This paper uses spatial econometric techniques to examine the spatial correlation between FDI to alternative (neighboring) regions. The sign of such correlations can provide evidence for or against alternative theories for FDI motivations. Using data on OECD countries from 1980-2000, we find evidence consistent with export platform FDI in Europe.

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