The market size and foreign direct investment relationship: a panel data analysis of the oecd: the founders and the rest

Abstract EN

What effect does market size have on outward foreign direct investment? is the key research theme addressed in this paper.

so, this paper aims at examining the market size and outward FDI relationship.

this relationship is estimated using a model that has been developed based on the knowledge-capital theory of multinational corporations.

panel data analysis of the OECD countries (the founders and the rest groups) is presented over the period 2010-2021.

the results of the estimated model demonstrate the positive influence of market size on outward FDI, positive signs of summing up GDPs supported by the expected effect of square differenced GDPs, providing evidence for horizontal FDI.

the predominance of horizontal FDI is for both the OECD founders and the OECD rest members groups.