The Contribution of FDI Flows To Domestic Investment: An Econometric Analysis of Developing Countries

Foreign direct investment flows may affect domestic investment in different dimensions. the interests related to the impact of fdi on domestic investment focus on whether fdi is a complement or a substitute for domestic investment. the aim of this paper is to research for the effects of fdi on domestic investment for turkey, brazil, russia, south africa and mexico by using time series analyses. for this purpose, we utilize gmm (generalized method of moments) methodology. the sample period is 1990:1-2012:3 for turkey and mexico; 1995:1-2012:3 for brazil; 1995:1-2012:2 for russia and 1990:1-2011:4 for south africa. the empirical results put forth an evidence of crowding out effect for turkey and south africa. on the other hand, it is found that fdi creates crowding in effects for russia. one other finding of the study is statistically insignificant coefficients for brazil and mexico