A Survey of Theory and Empirics of Foreign Direct Investment

Author: Toshiyuki Matsuura
Date: 2014/7
No: DP2014-002
JEL Classification codes: F2, L2
Language: Japanese
[ Abstract ]

This paper surveys recent development of theoretical and empirical studies on foreign direct investment (FDI). We first introduce the trends in foreign direct investment especially focusing on outward and inward Japanese FDI. Secondly, after summarizing traditional FDI theory and empirical evidences, we survey studies that focus on the issue of firm heterogeneity or that uses three country framework. Third, we introduce recent empirical analysis that investigates the impact of FDI both on host country and home country using firm-level or plant-level data. Finally, based on the recent trends in the research on FDI, we provide future research agenda.