Foreign direct investment, human capital and non-linearities in economic growth
AbstractThis paper makes a contribution to the existing literature on the foreign direct investment (FDI) and economic growth nexus by contrasting past empirical evidence and conventional wisdom and arriving at some interesting new results. By applying non-parametric methods, and thus taking into account non-linear effects of initial income and human capital on economic growth, we explore the FDI effect on growth in much greater detail than previous studies. Our findings not only confirm the non-linear effect of human capital in the presence of FDI inflows but also suggest that FDI inflows are growth enhancing in the middle-income countries while there is a 'two-regime' FDI effect for high-income countries. This new finding appears to be independent of OECD country membership.
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Bibliographic InfoArticle provided by Elsevier in its journal Journal of Macroeconomics.
Volume (Year): 32 (2010)
Issue (Month): 3 (September)
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Web page: http://www.elsevier.com/locate/inca/622617
Cross-country growth regressions FDI Human capital Semi-parametric model;
Other versions of this item:
- Constantina Kottaridi & Thanasis Stengos, 2008. "Foreign Direct Investment, human capital and non-linearities in economic growth," Working Papers 019, University of Peloponnese, Department of Economics.
- Thanasis Stengos & Costantina Kottaridi, 2008. "Foreign Direct Investment, Human Capital And Nonlinearities In Economic Growth," Working Paper Series 20-08, The Rimini Centre for Economic Analysis, revised Jan 2008.
- O47 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Measurement of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
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