The Influence of Foreign Direct Investment on Domestic Investment Processes in Latvia

Titarenko, Deniss (2005): The Influence of Foreign Direct Investment on Domestic Investment Processes in Latvia. Published in: Transport and Telecommunication , Vol. 7, No. 1 (2006): pp. 76-83.

Abstract

The primary aim of the paper is to estimate the extent of FDI influence on domestic investment processes in Latvia. Author analyses the theoretical issues of FDI effect on capital formation process in the host economy. The results of econometric analysis of the total investment model presented in this paper show the evidence of crowding out long-term effect of FDI on investment in Latvia.

• Item Type: MPRA Paper
• Language: English
• Keywords: foreign direct investment, econometric analysis of the total investment model, crowding in/out effect
• Subjects: O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development; E - Macroeconomics and Monetary Economics > E0 - General; E - Macroeconomics and Monetary Economics > E2 - Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy; F - International Economics > F2 - International Factor Movements and International Business; C - Mathematical and Quantitative Methods > C0 - General > C01 - Econometrics

References

Agosin M.R., Mayer R. Foreign Investment in Developing Countries: does It Crowd in Domestic Investment? UNCTAD Working Paper 146, February 2000.

Bosworth B. P., Collins S.M. Capital Flows to Developing Economies: Implications for Saving and Investment. Brookings Papers on Economic Activity: 1. Brookings Institution, 1999, pp. 143-69.

Hecht Y., Razin A., Shinar N.G. Interactions between capital inflows and domestic investment: Israel and developing countries. Israel Economic Review Vol. 2, No. 2 (2004), 1–14

Loungani P., Razin A. How Beneficial Is Foreign Direct Investment for Developing Countries? Finance and Development, Vol.38, No 2, June 2001.

Stikuts D. Latvia`s Potential Output – Using Production Function and HP-filter. In: Acta Universitatis Latviensis. Economics and Management. Riga: University of Latvia, Vol. 677, 2004, pp. 372-382.

Stikuts D. Measuring Output GAP in Latvia. Bank of Latvia. Working Paper 2/2003.