A spatial approach to the FDI-growth nexus in Spain: Dealing with the headquarters effect

Abstract: This paper examines the effects of inward FDI on economic growth across the Spanish regions over the period 1996-2013, paying particular attention to the "headquarters effect", namely that FDI is not always registered where it is effectively made but in the region in which the firm's headquarters is located. By estimating a panel Spatial Durbin Model to allow for the detection of spatial spillovers, two main findings are reported. First, FDI does foster economic growth. Second, only when the headquarters effect is properly addressed do spatial spillovers arise. Hence, this effect is masking the impact of regional FDI spillovers on growth, which affects the reliability of the results and, consequently, FDI policies choice. Importantly, the results are: a) robust to the way of computing the headquarters effect; b) independent of the spatial weight matrix specification; and c) confirmed when splitting FDI into different industrial and service branches.

 Fuente: International Business Review 28, nº 6 (2019),101597

Editorial: Elsevier Limited

 Fecha de publicación: 01/12/2019

Nº de páginas: 35

Tipo de publicación: Artículo de Revista

DOI: 10.1016/j.ibusrev.2019.101597

ISSN: 0969-5931,1873-6149

Proyecto español: Spanish Ministry of Education, Culture and Sports [gran tnumber FPU13/00791]

Url de la publicación: https://doi.org/10.1016/j.ibusrev.2019.101597