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Raphaël Chiappini
''FDI and trade: A Granger causality analysis in a heterogeneous panel''
( 2011, Vol. 31 No.4 )
This paper will investigate the Granger causality between outward Foreign Direct Investment (FDI) and the exports of goods and services in 11 European countries from 1996 to 2008. Using a new method to evaluate causality in a heterogeneous panel, we find that the causal relationship from FDI to exports is homogeneous among the panel. However, we find strong evidence of a heterogeneity of the causal relationship from exports to FDI in our sample.
Keywords: Foreign direct investment, exports, Granger causality, heterogeneous panel
JEL: F2 - International Factor Movements and International Business: General
F4 - Macroeconomic Aspects of International Trade and Finance: General
Manuscript Received : Jul 25 2011 Manuscript Accepted : Oct 21 2011

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