Working Paper: NBER ID: w4639
Authors: Magnus Blomström; An Kokko
Abstract: This paper examines two broad issues related to foreign investment by Swedish multinationals: first the effects of outward foreign direct investment on domestic investment, exports, and employment, and second, the effects on the domestic economy from the increasing division of labor between the parents and foreign affiliates of Swedish MNCs. The paper summarizes and synthesizes the existing empirical evidence on these matters (much of which has hitherto only been available in Swedish) and discusses some possible long run effects that have not received much attention in the literature.
Keywords: foreign direct investment; Sweden; multinational corporations; domestic investment; exports; employment
JEL Codes: F21; F23
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Outward FDI by Swedish MNCs (F23) | Domestic investment opportunities (F21) |
| Outward FDI by Swedish MNCs (F23) | Domestic exports (F10) |
| Outward FDI by Swedish MNCs (F23) | Domestic employment (J63) |
| Increased FDI (F21) | Decreased domestic investment (E22) |
| FDI substitutes for Swedish exports (F23) | Domestic exports (F10) |