SMU SOE Seminar (January 11, 2023): FDI and Investment Screening Policy

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TOPIC:

FDI AND INVESTMENT SCREENING POLICY

ABSTRACT Efforts to restrict Inward FDI (IFDI) have traditionally been modest. Recently there has been a dramatic increase in the number of countries screening IFDI. The costs imposed by screening raise concerns about the consequences for IFDI. In this paper, we leverage a structural gravity framework to quantify the effect of screening on the level of FDI in a host country, and on the distribution of IFDI across countries. We address these issues from three perspectives. First, partial equilibrium estimates suggest that screening reduces IFDI by 35%, on average. Second, general equilibrium estimates reveal that the unilateral adoption of screening reduces the aggregate IFDI of a new screener by, on average, 11%, but the impact varies from -3% to -23%. Finally, we consider a world where all non-screening hosts adopt screening. We find that IFDI is reduced on average by 13.4% for new screening hosts but this effect differs across hosts ranging from -3% to -29%. The impact on bilateral IFDI from the adoption of screening is even more varied, with the largest increase recorded as 6% while the largest drop is 64%. Third-country effects are also pronounced, with bilateral IFDI changes for bystanders ranging from -40% to 11%. Click here to view the CV.
		PRESENTER Laura Puzzello Monash University
		RESEARCH FIELDS International Economics Applied Econometrics Health Economics
		DATE: 11 January 2023 (Wednesday)
		TIME: 10am - 11.30am
		VENUE: Meeting Room 5.1, Level 5 School of Economics Singapore Management University 90 Stamford Road Singapore 178903

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