CMI Working Paper
| 2004
Determinants of foreign direct investment in services
Bergen: Chr. Michelsen Institute (CMI Working Paper WP 2004: 2) 25 p.
How to cite this publication:
Ivar Kolstad and Espen Villanger (2004). Determinants of foreign direct investment in services. Bergen: Chr. Michelsen Institute (CMI Working Paper WP 2004: 2)
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.
Social development, FDI, and domestic investment
Jan 2003 - Dec 2003
