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Foreign direct investment and income convergence

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  • Changkyu Choi

Abstract

The role of foreign direct investment (FDI) in the convergence of income level and growth has been investigated by panel data regressions. Bilateral FDI data from OECD from 1982 to 1997 is used. Income level and growth gaps between source and host countries turn out to decrease as bilateral FDI increases. It is also found that geographical closeness and common language play an important role in convergence in income level and growth.

Suggested Citation

  • Changkyu Choi, 2004. "Foreign direct investment and income convergence," Applied Economics, Taylor & Francis Journals, vol. 36(10), pages 1045-1049.
    • Handle: RePEc:taf:applec:v:36:y:2004:i:10:p:1045-1049
    DOI: 10.1080/0003684042000246759
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