Notes: The proposal should be 2-3 pages long. Save it as “Yoursurname_proposal_date.doc” and send it to
[email protected]fsv.cuni.cz. Subject of the e-mail must be: “Your surname_JPM194_proposal-date)”. Proposed Topic:
Registered in SIS: Yes Date of registration: 13.01.2013
Topic Characteristics:
My thesis will focus on governmental incentives for foreign direct investment (FDI) and the
corresponding international competition. The principal reason why governments grant subsidies to
multinational companies (MNC) lies in their expectation of productivity externalities spilling over from
MNCs to local firms. These effects are hardly internalizable, that is why governments are believed to
be entitled to try to attract more FDI than would correspond to the market equilibrium. Thus, many
scholars argue that the global level of incentives is above-optimal and that supranational coordination
would reduce it. I will try to show whether this really has to be the case; I will also attempt to
empirically verify my models. I will inquire into intra-industry FDI spillovers in a large quantitative
literature survey. I am going to use data from the World Competitiveness Report, World Bank’s World
Development Indicators, and additionally collect some data myself.
Some more description characterising the specificity of your research.
Hypotheses:
1. Intra-industry productivity spillovers from FDI are statistically and economically significant.
2. There is a difference between the results of top-journal and other empirical articles on FDI
spillovers.
3. Researchers publish preferably significant and positive estimates of FDI spillovers.
4. Supranational coordination does not necessarily lower the offered amount of incentives.
5. International subsidy competition for FDI is fierce.
Methodology:
Concerning the FDI spillover literature in the first part of the thesis, I am going to employ the
quantitative literature review methodology, commonly called a meta-analysis. Meta-analysis rigorously
combines the outcomes of several works that study the same phenomena and use the same or
comparable metrics. I will use especially the meta-regression procedure but, aside from the standard
approach, I will employ robust, pseudo-panel, and probability meta-regression as well. Evaluating the
combined significance, I will not rely only on the standard vote-counting method but I will also employ
a more advanced methodology using meta-statistics. Concerning the theoretical models of investment
incentives, my methodology will be mostly microeconomic; I am going to use especially the classical
models of oligopoly – Cournot, Stackelberg, etc. When trying to verify/falsify my microeconomic
models, I will rely mostly on statistical methods, namely cross-section regressions, and on the surveys
at the enterprise level.
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