Natural disasters, intra-national FDI spillovers, and economic divergence: Evidence from India

• 成果类型: Article
• 署名作者: Friedt, Felix L.; Toner-Rodgers, Aidan
• 署名单位: Macalester College; Federal Reserve System - USA; Federal Reserve Bank - New York
• 刊物名称: JOURNAL OF DEVELOPMENT ECONOMICS
• ISSN/ISSBN: 0304-3878
• DOI: 10.1016/j.jdeveco.2022.102872
• 发表日期: 2022
• 关键词: foreign direct investment; Multinational corporations; natural disasters; RISK; Economic growth; divergence

摘要

This paper studies the effects of natural disasters on foreign direct investment, considering the case of India. We document large and persistent investment reductions in affected regions following a disaster as well as lasting positive spillovers into otherwise unaffected Indian regions. Intra-national relocations account for more than two-thirds of the losses in affected areas, explaining the puzzlingly small country-level findings of previous works. Furthermore, we show that these investment shifts tend to flow into more developed, less disaster-prone regions, fueling the prominent divergence in India's economic growth. Combined, our results suggest that multinational firms consider both local cost and region-specific disaster risk when selecting locations for production.