Template-Type: ReDIF-Paper 1.0



Author-Name: Ivar Kolstad 

Author-Name: Espen Villanger 

Title: Determinants of foreign direct investment in services

Abstract: This study uses industry level foreign direct investment (FDI) data from 57 countries 1989-2000, to examine the host country determinants of FDI flows in services as a whole, and in the major service industries. Consistent with the observation that many services are non-tradable, we find that service FDI is market-seeking, and unaffected by trade openness. Producer services are important in binding together vertically disintegrated chains of production, accordingly we find a strong correlation between FDI in manufacturing and FDI in finance and transport. While composite political risk does not affect FDI in services, disaggregate socio-political indices prove significant in certain service industries.



Length: 25 pages

Creation-Date: 2004

File-URL: https://www.cmi.no/publications/file/1774-determinants-of-foreign-direct-investment-in.pdf

File-Format: Application/pdf

Number: WP 2004: 2

Classification-JEL: 

Keywords: Foreign direct investment

Services

Handle: RePEc:chm:wpaper:wp2004-2