IDEAS home Printed from https://ideas.repec.org/a/pes/ieroec/v5y2014i4p169-190.html
   My bibliography  Save this article

Analysis Of The Cobb-Douglas Production Function As A Tool To Investigate The Impact Of Fdi Net Inflows On Gross Domestic Product Value In Poland In The Period 1994–2012

Author

Listed:
  • Aneta Kosztowniak

    (Radom University of Technology and Humanities, Poland)

Abstract

The purpose of this paper is to analyse the impact of foreign direct investments net inflows on changes in GDP value in Poland in the period between 1994 and 2012 with the use of the Cobb-Douglas production function. The paper consist of five parts. Parts I and II present some aspects of the FDI influence on economic growth from the theoretical and empirical point of view. Part III defines conditions indispensable for the positive FDI impact on the economy of the host country. Part IV outlines changes of FDI flows in Poland in the period of 1994-2012. Part V includes the main assumptions of the Cobb-Douglas production function and an estimate of changes in GDP value for Poland in the period 1994–2012 with the use of the VECM. The factors significant for economic growth are also identified, including the significance of the net FDI inflows. Eventually, the effect of gross fixed capital formation, employment, FDI net inflows, exports and R&D on changes in the GDP value are determined.

Suggested Citation

  • Aneta Kosztowniak, 2014. "Analysis Of The Cobb-Douglas Production Function As A Tool To Investigate The Impact Of Fdi Net Inflows On Gross Domestic Product Value In Poland In The Period 1994–2012," Oeconomia Copernicana, Institute of Economic Research, vol. 5(4), pages 169-190, December.
    • Handle: RePEc:pes:ieroec:v:5:y:2014:i:4:p:169-190
    DOI: 10.12775/OeC.2014.032
    as

    Download full text from publisher

    File URL: http://dx.doi.org/10.12775/OeC.2014.032
    Download Restriction: no
    File URL: https://libkey.io/10.12775/OeC.2014.032?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Aizenman, Joshua & Noy, Ilan, 2006. "FDI and trade--Two-way linkages?," The Quarterly Review of Economics and Finance, Elsevier, vol. 46(3), pages 317-337, July.
    2. de Mello, Luiz R, Jr, 1999. "Foreign Direct Investment-Led Growth: Evidence from Time Series and Panel Data," Oxford Economic Papers, Oxford University Press, vol. 51(1), pages 133-151, January.
    3. Dollar, David & Kraay, Aart, 2003. "Institutions, trade, and growth : revisiting the evidence," Policy Research Working Paper Series 3004, The World Bank.
    4. Borensztein, E. & De Gregorio, J. & Lee, J-W., 1998. "How does foreign direct investment affect economic growth?1," Journal of International Economics, Elsevier, vol. 45(1), pages 115-135, June.
    5. Roghieh Gholami & Sang‐Yong Tom Lee & Almas Heshmati, 2006. "The Causal Relationship Between Information and Communication Technology and Foreign Direct Investment," The World Economy, Wiley Blackwell, vol. 29(1), pages 43-62, January.
    6. Magnus Blomström & Ari Kokko & Mario Zejan, 2000. "Technology, Market Characteristics and Spillovers," Palgrave Macmillan Books, in: Foreign Direct Investment, chapter 10, pages 160-176, Palgrave Macmillan.
    7. Nauro F. Campos & Yuko Kinoshita, 2002. "Foreign Direct Investment as Technology Transferred: Some Panel Evidence from the Transition Economies," Manchester School, University of Manchester, vol. 70(3), pages 398-419, June.
    8. Laura Alfaro & Areendam Chanda & Sebnem Kalemli-Ozcan & Selin Sayek, 2006. "How Does Foreign Direct Investment Promote Economic Growth? Exploring the Effects of Financial Markets on Linkages," NBER Working Papers 12522, National Bureau of Economic Research, Inc.
    9. Jon D. Haveman & Vivian Lei & Janet S. Netz, 2001. "International Integration and Growth: A Survey and Empirical Investigation," Review of Development Economics, Wiley Blackwell, vol. 5(2), pages 289-311, June.
    10. Philippe Aghion & Peter Howitt & David Mayer-Foulkes, 2005. "The Effect of Financial Development on Convergence: Theory and Evidence," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 120(1), pages 173-222.
    11. Henrik Hansen & John Rand, 2006. "On the Causal Links Between FDI and Growth in Developing Countries," The World Economy, Wiley Blackwell, vol. 29(1), pages 21-41, January.
    12. Walid Hejazi & A Edward Safarian, 1999. "Trade, Foreign Direct Investment, and R&D Spillovers," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 30(3), pages 491-511, September.
    13. Alfaro, Laura & Chanda, Areendam & Kalemli-Ozcan, Sebnem & Sayek, Selin, 2004. "FDI and economic growth: the role of local financial markets," Journal of International Economics, Elsevier, vol. 64(1), pages 89-112, October.
    14. Dollar, David & Kraay, Aart, 2003. "Institutions, trade, and growth," Journal of Monetary Economics, Elsevier, vol. 50(1), pages 133-162, January.
    15. David Dollar & Aart Kraay, 2004. "Trade, Growth, and Poverty," Economic Journal, Royal Economic Society, vol. 114(493), pages 22-49, February.
    16. Piotr MISZTAL, 2010. "Foreign Direct Investments As A Factor For Economic Growth In Romania," Journal of Advanced Studies in Finance, ASERS Publishing, vol. 1(1), pages 71-82.
    17. V. N. Balasubramanyam & M. Salisu & David Sapsford, 1999. "Foreign direct investment as an engine of growth," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 8(1), pages 27-40.
    18. Ram, Rati & Zhang, Kevin Honglin, 2002. "Foreign Direct Investment and Economic Growth: Evidence from Cross-Country Data for the 1990s," Economic Development and Cultural Change, University of Chicago Press, vol. 51(1), pages 205-215, October.
    19. Yuko Kinoshita, 2000. "R&D and technology spillovers via FDI: Innovation and absorptive capacity," CERGE-EI Working Papers wp163, The Center for Economic Research and Graduate Education - Economics Institute, Prague.
    20. Niels Hermes & Robert Lensink, 2003. "Foreign direct investment, financial development and economic growth," Journal of Development Studies, Taylor & Francis Journals, vol. 40(1), pages 142-163.
    21. Haveman, J.D. & Lei, V. & Netz, J.S., 1998. "International Integration and Growth: a Survey and Empirical Investigation," Papers 98-003, Purdue University, Krannert School of Management - Center for International Business Education and Research (CIBER).
    22. KH Zhang, 2001. "Does Foreign Direct Investment Promote Economic Growth? Evidence From East Asia And Latin America," Contemporary Economic Policy, Western Economic Association International, vol. 19(2), pages 175-185, April.
    23. Sophia P Dimelis & Sotiris K Papaioannou, 2010. "FDI and ICT Effects on Productivity Growth: A Comparative Analysis of Developing and Developed Countries," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 22(1), pages 79-96, February.
    24. Herzer, Dierk & Klasen, Stephan & Nowak-Lehmann D., Felicitas, 2008. "In search of FDI-led growth in developing countries: The way forward," Economic Modelling, Elsevier, vol. 25(5), pages 793-810, September.
    25. Laura Alfaro & Areendam Chanda & Sebnem Kalemli-Ozcan & Selin Sayek, 2006. "Foreign Direct Investment, Financial Markets and Economic," 2006 Meeting Papers 369, Society for Economic Dynamics.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Chaido Dritsaki & Pavlos Stamatiou, 2019. "Investigating the Impact of Market Openness on Economic Growth for Poland: An Autoregressive Distributed Lag Bounds Testing Approach to Cointegration," International Journal of Economics and Financial Issues, Econjournals, vol. 9(6), pages 123-131.
    2. Andrei Dalina-Maria, 2022. "Human Capital and Economic Growth in Romania: A Vector Error Correction Model (VECM)," HOLISTICA – Journal of Business and Public Administration, Sciendo, vol. 13(1), pages 110-124, July.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Abdullahi Ahmed & Enjiang Cheng & George Messinis, 2011. "The role of exports, FDI and imports in development: evidence from Sub-Saharan African countries," Applied Economics, Taylor & Francis Journals, vol. 43(26), pages 3719-3731.
    2. Clark Don P. & Highfill Jannett & de Oliveira Campino Jonas & Rehman Scheherazade S., 2011. "FDI, Technology Spillovers, Growth, and Income Inequality: A Selective Survey," Global Economy Journal, De Gruyter, vol. 11(2), pages 1-44, July.
    3. Ausloos, Marcel & Eskandary, Ali & Kaur, Parmjit & Dhesi, Gurjeet, 2019. "Evidence for Gross Domestic Product growth time delay dependence over Foreign Direct Investment. A time-lag dependent correlation study," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 527(C).
    4. M. Ayhan Kose & Eswar Prasad & Kenneth Rogoff & Shang-Jin Wei, 2009. "Financial Globalization: A Reappraisal," Panoeconomicus, Savez ekonomista Vojvodine, Novi Sad, Serbia, vol. 56(2), pages 143-197.
    5. repec:eco:journ1:2014-03-22 is not listed on IDEAS
    6. Burcu Türkcan & Alper Duman & I. Hakan Yetkiner, 2008. "How Does FDI and Economic Growth Affect Each Other? The OECD Case," Papers of the Annual IUE-SUNY Cortland Conference in Economics, in: Oguz Esen & Ayla Ogus (ed.), Proceedings of the Conference on Emerging Economic Issues in a Globalizing World, pages 21-40, Izmir University of Economics.
    7. Mohammad Sharif Karimi & Andrzej Cieslik, 2017. "Foreign Knowledge Spillovers and Total Factor Productivity Growth: Evidence from Four ASEAN Countries," Iranian Economic Review (IER), Faculty of Economics,University of Tehran.Tehran,Iran, vol. 21(2), pages 267-299, Spring.
    8. Humaira Raffat & Danish Ahmed Siddiqui, 2020. "Does Openness, and Productivity Matters for FDI: A Global Interactive Analysis Based on the Complementary Role of Institutions," Issues in Economics and Business, Macrothink Institute, vol. 6(2), pages 1-21, December.
    9. Burcu Turkcan & I. Hakan Yetkiner, 2010. "Endogenous determination of FDI growth and economic growth: the OECD case," International Journal of Public Policy, Inderscience Enterprises Ltd, vol. 5(4), pages 409-429.
    10. Akisik, Orhan & Gal, Graham & Mangaliso, Mzamo P., 2020. "IFRS, FDI, economic growth and human development: The experience of Anglophone and Francophone African countries," Emerging Markets Review, Elsevier, vol. 45(C).
    11. Sam Hobbs & Dimitrios Paparas & Mostafa E. AboElsoud, 2021. "Does Foreign Direct Investment and Trade Promote Economic Growth? Evidence from Albania," Economies, MDPI, vol. 9(1), pages 1-19, January.
    12. William R. Cline, 2010. "Financial Globalization, Economic Growth, and the Crisis of 2007-09," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 499, October.
    13. David Mayer‐Foulkes & Peter Nunnenkamp, 2009. "Do Multinational Enterprises Contribute to Convergence or Divergence? A Disaggregated Analysis of US FDI," Review of Development Economics, Wiley Blackwell, vol. 13(2), pages 304-318, May.
    14. Muhammad Shahbaz & Mohammad Mafizur Rahman, 2012. "The Dynamic of Financial Development, Imports, Foreign Direct Investment and Economic Growth: Cointegration and Causality Analysis in Pakistan," Global Business Review, International Management Institute, vol. 13(2), pages 201-219, June.
    15. Mouna Gammoudi & Mondher Cherif & Simplice Asongu, 2016. "FDI and Growth in the MENA countries: Are the GCC countries Different?," Working Papers of the African Governance and Development Institute. 16/015, African Governance and Development Institute..
    16. Herzer, Dierk & Klasen, Stephan & Nowak-Lehmann D., Felicitas, 2008. "In search of FDI-led growth in developing countries: The way forward," Economic Modelling, Elsevier, vol. 25(5), pages 793-810, September.
    17. Mustapha Sadni Jallab & Monnet Benoît Patrick Gbakou & René Sandretto, 2008. "Foreign Direct Investment, Macroeconomic Instability And Economic Growth in MENA Countries," Working Papers 0817, Groupe d'Analyse et de Théorie Economique Lyon St-Étienne (GATE Lyon St-Étienne), Université de Lyon.
    18. E. M. Ekanayake & John R. Ledgerwood, 2010. "How Does Foreign Direct Investment Affect Growth In Developing Countries? An Empirical Investigation," The International Journal of Business and Finance Research, The Institute for Business and Finance Research, vol. 4(3), pages 43-53.
    19. Fayissa, Bichaka & Nsiah, Christian & Joshi, Prathibha V., 2010. "Perceived Financial Risk and the Economic Growth of sub-Saharan African Countries - Rischio finanziario percepito e divergenza nella crescita economica dei paesi dell’Africa sub-sahariana," Economia Internazionale / International Economics, Camera di Commercio Industria Artigianato Agricoltura di Genova, vol. 63(2), pages 179-192.
    20. Rosemary Stanley Taylor, 2020. "Foreign direct investment and economic growth. Analysis of sectoral foreign direct investment in Tanzania," African Development Review, African Development Bank, vol. 32(4), pages 699-717, December.
    21. Adedoyin, Festus Fatai & Bekun, Festus Victor & Driha, Oana M. & Balsalobre-Lorente, Daniel, 2020. "The effects of air transportation, energy, ICT and FDI on economic growth in the industry 4.0 era: Evidence from the United States," Technological Forecasting and Social Change, Elsevier, vol. 160(C).

    More about this item

    Keywords

    FDI; GDP; Cobb-Douglas production function; VECM (Vector Error Corection Model);
    All these keywords.

    JEL classification:

    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • C52 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Evaluation, Validation, and Selection

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pes:ieroec:v:5:y:2014:i:4:p:169-190. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Adam P. Balcerzak (email available below). General contact details of provider: https://edirc.repec.org/data/ibgtopl.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.