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Foreign Direct Investment And Economic Growth

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  • George Ciobanu

    (University of Craiova, Faculty of Economics and Business Administration, Romania)

Abstract

How does foreign direct investment triggered by foreign economic growth affect domestic economic activity? Estimates produced using foreign GDP growth rates for changes in foreign activity indicate that 10% greater foreign capital investment is associated with 2.2% greater domestic investment, and that 10% greater foreign employee compensation is associated with 4.0% greater domestic employee compensation. Changes in foreign and domestic sales, assets, and numbers of employees are likewise positively associated.

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Bibliographic Info

Article provided by University of Craiova, Faculty of Economics and Business Administration in its journal Revista Tinerior Economisti(The Young Economists Journal).

Volume (Year): 1 (2007)
Issue (Month): 9 (November)
Pages: 94-97

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Handle: RePEc:aio:rteyej:v:1:y:2007:i:9:p:94-97

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Related research

Keywords: foreign direct investment; economic growth; multinational firms;

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  1. Kei-Mu Yi, 2000. "Can vertical specialization explain the growth of world trade?," Staff Reports 96, Federal Reserve Bank of New York.
  2. Helpman, Elhanan, 1984. "A Simple Theory of International Trade with Multinational Corporations," Journal of Political Economy, University of Chicago Press, vol. 92(3), pages 451-71, June.
  3. Antras, Pol, 2003. "Firms, Contracts, and Trade Structure," Scholarly Articles 3196328, Harvard University Department of Economics.
  4. Paul A. Samuelson, 2004. "Where Ricardo and Mill Rebut and Confirm Arguments of Mainstream Economists Supporting Globalization," Journal of Economic Perspectives, American Economic Association, vol. 18(3), pages 135-146, Summer.
  5. Markusen, James R., 2002. "Multinational Firms and the Theory of International Trade," MPRA Paper 8380, University Library of Munich, Germany.
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