Premium
Pitfalls in the use of foreign direct investment statistics
Author(s) -
O'Mahony Clare,
Barry Frank
Publication year - 2019
Publication title -
the world economy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.594
H-Index - 68
eISSN - 1467-9701
pISSN - 0378-5920
DOI - 10.1111/twec.12836
Subject(s) - foreign direct investment , multinational corporation , globalization , homogeneous , foreign capital , economics , summary statistics , investment (military) , international economics , capital (architecture) , international trade , business , macroeconomics , statistics , geography , political science , market economy , finance , physics , mathematics , archaeology , politics , law , thermodynamics
Foreign direct investment ( FDI ) statistics are widely used to study the impact of international capital movements and multinational enterprise ( MNE ) activities. FDI intensity is also an important indicator of globalisation and economic integration. Datasets spanning long time periods and with broad country coverage have been employed in numerous studies to analyse various aspects of the determinants and consequences of FDI . Focusing on a relatively homogeneous group of six Western European EU countries, the present study finds major inconsistencies in the construction and coverage of these data both through time and across countries, leading to large discrepancies. Asymmetries will be far greater for broader groups of more economically and institutionally diverse countries. This study recommends extreme caution in drawing conclusions based on FDI data.