This study empirically examines how COVID-19 damages have impacted foreign direct investment (FDI) using quarterly data of bilateral FDI flows from 173 to 192 countries from the first quarter of 2019 to the second quarter of 2021. We measure the severity of COVID-19 damages using three indicators—the number of confirmed cases, the number of deaths, and the stringency index of government policies that restrict people’s activities. We differentiate FDI flows in terms of two different entry modes—greenfield FDI and cross-border mergers & acquisitions (M&A). FDI flows are measured in terms of the number of cases/deals and the US dollar values.We find heterogeneous effects of COVID-19 damages on FDI according to sectors and entry modes. In the manufacturing sector, COVID-19 damages in host countries have had significant negative impacts on both greenfield FDI and cross-border M&A, whereas those in home countries do not show any significant negative impacts on both types of FDI. In the service sector, on the other hand, COVID-19 damages in both the host and home countries are found to have negative impacts on greenfield FDI, whereas the impact of COVID-19 on cross-border M&A appears to be mostly insignificant.
権利
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雑誌名
IDE Discussion Paper
雑誌名(英)
IDE Discussion Paper
巻
831
発行年
2022-03
出版者
Institute of Developing Economies (IDE-JETRO)
著者版フラグ
publisher
JEL分類
JEL:F21 - International Investment • Long-Term Capital Movem …
JEL:F23 - Multinational Firms • International Business
JEL:I15 - Health and Economic Development
Impacts of COVID-19 on foreign direct investment
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