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Does inward FDI crowd-out domestic investment? evidence from Uganda

Kasule, Twaha Ahmed and Mat Ghani, Gairuzazmi and Mohamad, Noorihsan and Mat Derus, Alias (2014) Does inward FDI crowd-out domestic investment? evidence from Uganda. In: Global Conference on Business and Social Science, 15-16 December 2014, Kuala Lumpur.

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This paper investigates the crowding-out effect of foreign direct investment on domestic investment in Uganda. The analysis examines the existence of this effect on the economy as a whole and at sectoral level for all the 9 production sectors, using data from 1992 to 2012. Our results reveal a robust, neutral effect on the aggregate economy. At the sectoral level, initial results suggest the existence of a crowding-out effect in four sectors, crowding-in effect in two sectors and a neutral effect in three sectors. But overall, the results are robust in only six sectors. Finally, our exogeneity test for the FDI variable illustrate that past growth rates included in the investment function do not influence inward FDI, implying that there is no endogeneity problem in our analysis.

Item Type: Conference or Workshop Item (Full Paper)
Additional Information: 2565/44290 ISBN: 978-967-13147-0-8
Uncontrolled Keywords: Crowding-out effect, Displacement effect, Foreign Direct Investment, sectoral level.
Subjects: H Social Sciences > HB Economic Theory > HB3711 Business cycles. Economic fluctuations
H Social Sciences > HC Economic History and Conditions > HC94 By region or country
H Social Sciences > HD Industries. Land use. Labor > HD72 Economic growth, development, planning
Kulliyyahs/Centres/Divisions/Institutes (Can select more than one option. Press CONTROL button): Kulliyyah of Economics and Management Sciences > Department of Economics
Depositing User: Dr. Noorihsan Mohamad
Date Deposited: 19 Aug 2015 10:01
Last Modified: 19 Aug 2015 10:01
URI: http://irep.iium.edu.my/id/eprint/44290

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