The impact of regulations on the FDI-growth nexus within the institution-based view: A nonlinear specification with varying coefficients |
| |
Authors: | Elena Ketteni Constantina Kottaridi |
| |
Affiliation: | 1. School of Economic Sciences and Administration, Frederick University, 7, Y. Frederickou Street, Pallouriotisa, Nicosia, 1036, Cyprus;2. Department of Economics, University of Piraeus, Karaoli & Dimitriou 80, 18534 Piraeus, Greece |
| |
Abstract: | The impact of Multinational Enterprise (MNE) activities on economic development and poverty reduction constitute a specific field of study within International Business (IB) scholarship during the last decade. Extending the institution-based view that “institutions matter”, we shift the focus of interest on the effect of institutions in the FDI-growth nexus which, surprisingly, have been overlooked by respective literature. A profound understanding of the FDI impact on economic growth cannot neglect institutions that shape the macro environment where MNEs operate. Within this rationale, this paper examines the effect of FDI on growth under different formal institutions placing emphasis to credit and labour market regulatory systems in both advanced and developing countries. Most empirical studies stemming mainly from the economics perspective, assume that the FDI growth effect is linear and incorporate specific functional forms for their regression relationships. We rely on more advanced econometric methods that allow for the regression coefficients to vary as smooth functions of other variables, allowing for more plausible empirical results. Our findings strongly support our suggestion that the host institutional context shape the strategies, structures and competitiveness of MNEs’ activities which they then affect differently economic growth. We thus provide useful insights regarding the long-lasting debate on the FDI-growth nexus. |
| |
Keywords: | C14 L51 O43 O47 G28 FDI Institutions MNEs Regulation Labour market Credit liberalisation Growth |
本文献已被 ScienceDirect 等数据库收录! |
|