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Fdi, Growth And Level Of Development: Analysis Of 76 Countries For The Period 1980-2010

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  • Stephen G. GRUBAUGH

Abstract

Empirical studies of the relationship between Foreign Direct Investment (FDI) and economic growth have inconsistent conclusions. This study considers alternative estimation procedures, selection of conditioning variables, the interaction of FDI and other variables, and the sample of countries used as possible explanations Only by varying the sample of countries does this study generate a range of results for the effect of FDI on growth. Specifically, dividing countries by development level the estimated relationship between FDI and growth varies from negative and significant to insignificant to positive and significant. In general, parameter instability across development level is found.

Suggested Citation

  • Stephen G. GRUBAUGH, 2019. "Fdi, Growth And Level Of Development: Analysis Of 76 Countries For The Period 1980-2010," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 19(2), pages 5-18.
    • Handle: RePEc:eaa:aeinde:v:19:y:2019:i:2_1
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    More about this item

    Keywords

    Foreign Direct Investment (FDI); economic growth; panel estimation; parameter stability.;
    All these keywords.

    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • O19 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - International Linkages to Development; Role of International Organizations
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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