Outward FDI and Home Country Exports: Theoretical Approaches and Empirical Evidence

ABSTRACT

This article reviews the growing body of literature that empirically analyzes the impact of outward FDI on home country exports. Focusing the analysis on the various types of studies and identifying the methods used and the countries analyzed, this study allows us to identify gaps in the literature and make suggestions for future research. Future research efforts should focus on more disaggregated data, particularly at the firm and product levels, and adopt a multilateral approach, which is essential for a complete analysis of the relationship between FDI and exports.

KEYWORDS:

• Exports
• home country
• literature review
• outward FDI

Notes

¹ The authors presented the individual results by industry. Regarding the final products, there was a complementary relationship in 4 of the 10 industries analyzed. Other industries have yielded inconclusive results.

² Note that this trend was also found by Lipsey and Ramstetter (2003) at the industry level.

³ Note that this table does not include the work of Engel and Procher (2013), since the authors use a different approach, not analyzing the causal relationship between FDI and exports. However, it is an important approach to understanding the FDI/exports relationship.