The negative effect of regulatory divergence on foreign direct investment

Jean-Marc Fournieri iOECD

Organisation for Economic Co-operation and Development

关键词: gravity model;    product market regulation;    multinational firms;    foreign direct investment;    heterogeneity;   

DOI  :  https://doi.org/10.1787/5jrqgvg0dw27-en

学科分类：社会科学、人文和艺术（综合）

来源: OECD iLibrary

【 摘 要 】

The determinants of foreign direct investment (FDI) are explored with gravity models, using a Poisson estimator and a linear estimator, both with fixed effects. The heterogeneity of product market regulations has a large and robust impact on cross-border investment: a reduction of regulatory divergence by one fifth could increase FDI by about 15%. In particular, the divergence of command and control regulations and of protection of incumbents (antitrust exemptions, entry barriers in networks and services) reduce cross-border investment. In addition, countries with higher employment protection have both less inward and less outward FDI, and there is some evidence that more complex regulatory procedures reduce inward FDI.