Abstract

The literature linking foreign direct investment (FDI) and local economic development mostly addresses productivity effects on locally-owned firms. In this regard, domestic entrepreneurship also represents an interesting focus through to which to consider the direction of the spillover from FDI to the host economy. In this study, we investigate the effects of FDI inflows on domestic entrepreneurship. In particular, we study how the rates of entrepreneurship in host countries respond to foreign investment, and whether such effects depend on the industry type. Furthermore, entrepreneurial activities at different phases of their life span are considered to assess whether FDI effects vary by the type of entrepreneurship.

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