Journal Article

Foreign direct investment and entrepreneurship: gender differences across international economic freedom and taxation

Small Business Economics, 50(4): 887-897

Using recent cross-national data, this paper examines the impact of foreign direct investment (FDI) on entrepreneurship activity. The impact of FDI on entrepreneurship is not clear a priori, with possibilities of both a negative effect (crowding out) and a positive effect (synergy or complementarity via spillovers). Results find support for the crowding out effect; however, this effect varies across nations with different prevalence of entrepreneurship. Another focus of this work is on gender differences. The crowding out effect is stronger for the full sample rather than the subsample of female entrepreneurship. This finding stands up to a battery of robustness checks. Policy implications are discussed.

Author

Rajeev Goel, PhD | Institut für Weltwirtschaft - Kiel Institute for the World Economy
Rajeev Goel