Testing for the Bidirectional Relationship Between FDI in Services and Trade in Services: Evidence from Emerging Economies

IF 1.1 Q4 BUSINESS

Foreign Trade Review Pub Date : 2022-05-06 DOI:10.1177/00157325221095650

P. Jithin, M. S. Babu

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Abstract

We examine the two-way links between foreign direct investments (FDI) in services and trade in services for 26 emerging economies from 2003 to 2015 using sectoral and sectoral disaggregated FDI data. Within a multivariate framework, we use panel unit root tests, recently developed heterogeneous panel cointegration and panel vector error correction model (VECM). Our results confirmed the cointegrating relationship between trade in services, FDI in services, financial services FDI and nonfinancial services FDI. We find the existence of long-run unidirectional causality from trade in services to FDI in services. However, the disaggregated analysis shows a bidirectional link between nonfinancial services FDI and trade in services in the short run. Still, there is no causality between financial services FDI and trade in services both in the short run and long run. The result also shows the evidence of unidirectional causality running from trade in services to nonfinancial services FDI in the long run. It implies that sectoral decomposition matters in the FDI–trade nexus in emerging economies. JEL Codes: G20, F14, G20, F23

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服务业FDI与服务贸易双向关系的检验:来自新兴经济体的证据

我们使用部门和部门分类FDI数据，研究了2003年至2015年26个新兴经济体服务领域的外国直接投资(FDI)与服务贸易之间的双向联系。在多变量框架内，我们使用面板单位根检验，最近开发的异质性面板协整和面板向量误差校正模型(VECM)。我们的研究结果证实了服务贸易、服务业FDI、金融服务业FDI和非金融服务业FDI之间的协整关系。我们发现服务贸易与服务业FDI之间存在长期的单向因果关系。然而，分类分析表明，短期内非金融服务FDI与服务贸易之间存在双向联系。然而，无论从短期还是长期来看，金融服务业FDI与服务贸易之间都不存在因果关系。结果还表明，从长期来看，从服务贸易到非金融服务业FDI存在单向因果关系。这意味着，在新兴经济体的外商直接投资与贸易关系中，部门分解很重要。JEL代码:G20, F14, G20, F23

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来源期刊

Foreign Trade Review Multiple-

CiteScore

2.50

自引率

23.10%

发文量