Abstract
This article examines the effects of greenfield investment and M&As on domestic investment using panel data for 100 developing countries for the period 2003 to 2011. It is shown that while cross-border M&As do not have a significant effect on domestic investment, greenfield FDI has a large crowding-out effect.
Notes
1 The data are available at http://unctad.org/en/pages/DIAE/World%20Investment%20Report/Annex-Tables.aspx
2 The data are available at http://data.worldbank.org/data-catalog/world-development-indicators
3 The data are available at http://info.worldbank.org/governance/wgi/index.aspx#home
4 Fixed- and random-effects estimates are very similar. Since the Hausman test rejects the random effects assumption at the 5% level, we only report the former.