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Inward FDI and growth: The role of macroeconomic and institutional environment

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Author Info

  • Alguacil, M.
  • Cuadros, A.
  • Orts, V.

Abstract

This paper contributes to the discussion on the role played by the absorptive capacities within host economies in their ability to grow and to exploit FDI efficiently. The outcomes for a sample of developing economies during the period 1976-2005 show differences associated to both the method of estimation (the system GMM vs OLS method) as well as the level of economic development. They also reveal the importance of controlling for those local capacities related to the macroeconomic and institutional environment. Thus, host country governments should develop a set of policies that are not only focused on inward FDI promotion but also on the improvement of their political and economic framework.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Policy Modeling.

Volume (Year): 33 (2011)
Issue (Month): 3 (May)
Pages: 481-496

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Handle: RePEc:eee:jpolmo:v:33:y:2011:i:3:p:481-496

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Web page: http://www.elsevier.com/locate/inca/505735

Related research

Keywords: Foreign direct investment Economic growth Macroeconomic stability Institutional quality System GMM models Developing countries;

References

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Citations

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Cited by:
  1. Angelo Antoci & Paolo Russu & Elisa Ticci, 2013. "Investment inflows and sustainable development in a natural resource-dependent economy," Department of Economics University of Siena 670, Department of Economics, University of Siena.
  2. Adom, Philip K. & Kwakwa, Paul Adjei, 2014. "Effects of changing trade structure and technical characteristics of the manufacturing sector on energy intensity in Ghana," Renewable and Sustainable Energy Reviews, Elsevier, vol. 35(C), pages 475-483.
  3. Joshua Aizenman & Yothin Jinjarak & Donghyun Park, 2013. "Capital Flows and Economic Growth in the Era of Financial Integration and Crisis, 1990–2010," Open Economies Review, Springer, vol. 24(3), pages 371-396, July.
  4. Giorgia Giovannetti & Elisa Ticci, 2013. "Foreign Direct Investment in Sub-Saharan Africa: Drivers and the Challenge of the Land-Energy Nexus," Working Papers - Economics wp2013_09.rdf, Universita' degli Studi di Firenze, Dipartimento di Scienze per l'Economia e l'Impresa.
  5. Taganov, Boris, 2014. "FDI and Long-term Economic Growth in Russia," MPRA Paper 55465, University Library of Munich, Germany.
  6. Balatoni, András & Pitz, Mónika, 2012. "A működőtőke hatása a bruttó nemzeti jövedelemre Magyarországon
    [The effect of direct investment on Hungary s gross national income]
    ," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(1), pages 1-30.
  7. Kamel ABDELLAH ( GREThA, CNRS, UMR 5113 & ISG, UNIVERSITE DE TUNIS) & Dalila NICET-CHENAF (GREThA, CNRS, UMR 5113) & Eric ROUGIER (GREThA, CNRS, UMR 5113), 2012. "FDI and macroeconomic volatility: A close-up on the source countries," Cahiers du GREThA 2012-21, Groupe de Recherche en Economie Théorique et Appliquée.
  8. Neiva de Figueiredo, João, 2013. "Are corruption levels accurately identified? The case of U.S. states," Journal of Policy Modeling, Elsevier, vol. 35(1), pages 134-149.

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