Push Factors of Outward FDI—A Cross-Country Analysis of Developed and Developing Countries



This paper empirically examines macroeconomic push factors for different segments (lower, median and upper) of OFDI distribution based on a cross-country analysis involving advanced economies (AE) and developing economies (DE). It is observed that the degree of economic development (nominal GDP, share of non-agricultural GDP, per capita income level), level of global integration (inward FDI stock), technological development (ICT goods import, R&D expenditure) of ‘home country’ have a positive influence on outward FDI, whereas interest rate is found to be negatively associated with the OFDI. Effects of these determinants are of varying magnitude across different segments (lower, median and upper strata) of the distribution of OFDI. Apart from various macroeconomic indicators for which hard data are available, perception-based indicators on control of corruption, governance aspects and climate of ease of doing business which are much weaker in developing economies than that of advanced economies also act as push factors of OFDI from developing countries.



An earlier version of this paper was presented in the one-day seminar on FDI: Issues and Policy organised by Knowledge Forum at Centre for Policy Studies, IIT Bombay on 24 February 2018. We are grateful to Prof. N. S. Siddharthan and the participants of the seminar for useful comments and suggestions. The errors that remain are our own.


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© Springer Nature Singapore Pte Ltd. 2020

Authors and Affiliations

  1. 1.Reserve Bank of IndiaMumbaiIndia
  2. 2.Department of Humanities and Social SciencesIndian Institute of Technology BombayMumbaiIndia

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