Foreign Direct Investors as Agents of Economic Transition: An Instrumental Variables Analysis

dc.contributor.author

Malesky, EJ

dc.date.accessioned

2018-12-10T04:24:26Z

dc.date.available

2018-12-10T04:24:26Z

dc.date.issued

2009-03-19

dc.date.updated

2018-12-10T04:24:25Z

dc.description.abstract

Previous empirical analysis has noted a correlation between Foreign Direct Investment (FDI) and economic reformin Eastern Europe and the Former Soviet Union, but has attributed the relationship to investors rewarding countries after reform decisions. Little attention has been paid to the fact that investors' lobbying efforts may actually influence reform choices. This paper finds a positive effect of FDI on reform progress through apanel analysis of investor influence in 27 transition states (1991-2004). To address endogeneity bias, the exogenous portion of a country's exchange rate movement is used as an instrument in a two-stage procedure. The underlying counterfactual comparison that results from this approach is between two similarly situated countries, but where one country experienced a large shift in the share of FDI in its economy as a result of changes in the international economy and the other did not. Further analysis reveals that the relationship is particularly strong in the manufacturing and service sectors, but does not hold for construction, utilities, or natural resource based projects. © 2009 E. J. Malesky.

dc.identifier.issn

1554-0626

dc.identifier.issn

1554-0634

dc.identifier.uri

https://hdl.handle.net/10161/17770

dc.language

English

dc.publisher

Now Publishers

dc.relation.ispartof

Quarterly Journal of Political Science

dc.relation.isversionof

10.1561/100.00008068

dc.subject

Foreign Direct Investment

dc.subject

Transition

dc.subject

Economic Reform

dc.subject

Eastern Europe

dc.subject

Instrumental Variables

dc.title

Foreign Direct Investors as Agents of Economic Transition: An Instrumental Variables Analysis

dc.type

Journal article

duke.contributor.orcid

Malesky, EJ|0000-0001-5737-9195

pubs.begin-page

59

pubs.end-page

85

pubs.issue

1

pubs.organisational-group

Trinity College of Arts & Sciences

pubs.organisational-group

Duke

pubs.organisational-group

Political Science

pubs.publication-status

Published

pubs.volume

4

Files

Original bundle

Now showing 1 - 1 of 1
Loading...
Thumbnail Image
Name:
Malesky_QJPS_2009.pdf
Size:
159.56 KB
Format:
Adobe Portable Document Format
Description:
Accepted version