The FDI (Foreign Direct Investment) database provides a worldwide coverage (96 countries of the GTAP 6.2 database for stocks and 70 countries for flows) of harmonized bilateral flows and stocks of FDI for 26 sectors, in line with the Eurostat classification. The data only concern 2004. This dataset is to be used in CGE modelling, for example to assess the effects of trade liberalization while taking into account FDI linkages.
Methodology: a Short DescriptionThe construction of the FDI database follows three steps:
1. We gather available raw data. The first version contains data from IMF, CNUCED, OECD, and Eurostat. The second version adds WiiW and China Statistical Yearbook as raw data.
2. We fill missing values using estimates obtained from gravity-based regressions on Eurostat data.
3. We balance the database using a quadratic optimization method. The procedure minimizes the discrepancies between our prior information (both original sources and estimates) and final values while verifying constraints, based on aggregate information.
Please, note that the methodology used to construct missing data (gravity model) and to balance the dataset makes it inappropriate for econometric studies.