Economia

Colecção

Documentos de Trabalho nº 98

Carlos Pestana Barros, Bruno Damásio e João Ricardo Faria

Reverse FDI in Europe: An Analysis of Angola’s FDI in Portugal

Lisboa 2011

O CEsA não confirma nem infirma quaisquer opiniões expressas pelos autores nos documentos que edita.

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Reverse FDI in Europe: An Analysis of Angola’s FDI in Portugal

Carlos Pestana Barros, Bruno Damásio e João Ricardo Faria

CEsA Centre of African and Development Studies Faculty of Economics and Management Technical University of Lisbon

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ABSTRACT
This paper analyses investment from Angola in Portugal. An open economy model with money laundering is proposed and then tested with a time series Bayesian regression. The result reveals that exports and corruption are the positive determinants of Angola FDI in Portugal. Policy implications are derived.

KEYWORDS: FDI, Angola, Portugal, corruption and exports. JEL CLASSIFICATION NUMBERS: F29, O55, F41

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REVERSE FDI IN EUROPE: AN ANALYSIS OF ANGOLA’S FDI IN PORTUGAL

1. INTRODUCTION
The literature on Foreign Direct Investment (FDI) is large and wide and has examined a number of diverse issues, among them, to list a few, domestic capital stock (Desai et al, 2005), economic growth (Prasad et al., 2007), employment protection (Dewit et al., 2009), exports (Helpman et al., 2004), knowledge capital ( Carr et al., 2001), location choice (Becker et al., 2005), multinational characteristics (Zhang and Markusen, 1999), productivity spillovers (Barrios and Strobl, 2002), total factor productivity (De Mello, 1999), and technology transfer (Glass and Saggi, 2002). This paper contributes to the literature by examining Angola’s FDI in Portugal. This is a new topic in the literature, since most studies focus on FDI flows from developed countries to poor countries (e.g., De Mello, 1997), either adopting a micro approach with company data (Alfaro et al, 2010; Gorg, Muhlen and Nunnenkamp, 2010) or adopting a macro approach