The negative effect of regulatory divergence on foreign direct investment: = L'effet négatif de l'hétérogénéité des réglementations sur l'investissement direct étranger

The determinants of foreign direct investment (FDI) are explored with gravity models, using a Poisson estimator and a linear estimator, both with fixed effects. The heterogeneity of product market regulations has a large and robust impact on cross-border investment: a reduction of regulatory diverge...

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Bibliographic Details
Main Author: Fournier, Jean-Marc (Author)
Format: Electronic eBook
Language:English
Published: Paris OECD Publishing 2015
Series:OECD Economics Department Working Papers no.1268
Subjects:
Online Access:DE-862
DE-863
Summary:The determinants of foreign direct investment (FDI) are explored with gravity models, using a Poisson estimator and a linear estimator, both with fixed effects. The heterogeneity of product market regulations has a large and robust impact on cross-border investment: a reduction of regulatory divergence by one fifth could increase FDI by about 15%. In particular, the divergence of command and control regulations and of protection of incumbents (antitrust exemptions, entry barriers in networks and services) reduce cross-border investment. In addition, countries with higher employment protection have both less inward and less outward FDI, and there is some evidence that more complex regulatory procedures reduce inward FDI.
Physical Description:1 Online-Ressource (35 Seiten) 21 x 29.7cm.

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