Business, Management and Accounting
3 years ago

Inward foreign investment linked to increased economic volatility in manufacturing sectors.

Research in Globalization
The impact of inward FDI on output growth volatility: A country-sector analysis
Isaac Adjei Mensah, Emmanuel Kwasi Mensah

Paper Summary

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The study looked at how foreign investment affects economic stability in different industries in OECD countries from 1990 to 2015. They found that more foreign investment in certain industries can lead to more economic ups and downs. Specifically, when foreign investment is focused on making final products, it can increase economic volatility. This effect is stronger in industries that need a lot of money to operate.