Endogenous determination of FDI growth and economic growth: the OECD case
AbstractThis paper tests the endogenous relationship between Foreign Direct Investment (FDI) growth and economic growth using a panel data set for 23 Organisation for Economic Co-operation and Development (OECD) countries for the period 1975-2004. In particular we estimate a two-equation simultaneous equation system with the Generalised Methods of Moments (GMM) that treat economic growth and FDI growth as endogenous variables. We find that FDI growth and economic growth are significant determinants of each other. We also find that export growth rate and human capital are statistically significant determinants of both FDI growth and economic growth. Our findings lead us to conclude that FDI growth and economic growth have an endogenous relationship.
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Bibliographic InfoArticle provided by Inderscience Enterprises Ltd in its journal Int. J. of Public Policy.
Volume (Year): 5 (2010)
Issue (Month): 4 ()
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FDI growth; foreign direct investment; economic growth; panel data; generalised methods of moments; Organisation for Economic Cooperation and Development; OECD; two-equation simultaneous equations; endogenous variables; significant determinants; exports; human capital; statistics; endogenous relationships; public policy; governance.;
Other versions of this item:
- Burcu Türkcan & I. Hakan Yetkiner, 2008. "Endogenous Determination of FDI Growth and Economic Growth:The OECD Case," Working Papers 0807, Izmir University of Economics.
- C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Longitudinal Data; Spatial Time Series
- O5 - Economic Development, Technological Change, and Growth - - Economywide Country Studies
- F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
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