Foreign Direct Investment and Economic Growth in the European Union
AbstractThis paper contains an empirical assessment of the growth effects of foreign direct investment (FDI) in European Union (EU) countries, when controlling for other growth determinants. Using data over the period 1980-1996, we obtained estimates of the growth effects of FDI for each country in isolation and by pooling the data for the whole Union. Country-specific estimates suggest that growth determinants vary across EU members and that only past FDI inflows have a significant effect on growth. Interestingly, when data are pooled, the empirical results show that FDI has a positive effect on the growth rate of EU economies both directly and indirectly (through trade reinforcement). Also, unlike previous empirical findings concerning developing economies, we obtained evidence that the growth effect of FDI is not conditional upon the level of human capital in developed host countries.
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Bibliographic InfoArticle provided by Center for Economic Integration, Sejong University in its journal Journal of Economic Integration.
Volume (Year): 18 (2003)
Issue (Month): ()
Foreign direct investment; Economic growth;
Find related papers by JEL classification:
- F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
- F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
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- Ainura Uzagalieva & Evžen Kočenda & Antonio Menezes, 2012. "Technological Innovation in New European Union Markets," Working Papers 312, Institut für Ost- und Südosteuropaforschung (Institute for East and South-East European Studies).
- Talberth, John & Bohara, Alok K., 2006. "Economic openness and green GDP," Ecological Economics, Elsevier, vol. 58(4), pages 743-758, July.
- Nappo, Alessandra Francesca, 2011. "The environment in the dynamics and interactions between economic growth and openness to international trade," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 114631, European Association of Agricultural Economists.
- Ainura Uzagalieva & Evžen Kocenda & Antonio Menezes, 2010. "Technological Imitation and Innovation in New European Union Markets," CESifo Working Paper Series 3039, CESifo Group Munich.
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