IDEAS home Printed from https://ideas.repec.org/b/sgm/wnwzuw/y2019v1ch8p165-186.html
   My bibliography  Save this book

The Process of Catching up with the Economic Development of OECD Countries and the Role of Foreign Direct Investment in this Process

Editor

Listed:
  • Justin Yifu Lin
    (National School of Development, University of Beijing)

  • Alojzy Z. Nowak
    (Faculty of Management, University of Warsaw)

Author

Listed:
  • Marian Gorski

    (Faculty of Management, University of Warsaw)

  • Patrycja Chodnicka-Jaworska

    (Faculty of Management, University of Warsaw)

Abstract

The article consists of two parts. In part one we describe the level of economic development of 51 countries associated with the Organization for Economic Cooperation and Development (OECD) in terms of their GDP per capita. We suggest dividing these countries into three groups: highly, moderately, and least developed. Then, using the average annual growth rate in the period 2005–2016, we distinguish countries: developing, in stagnation, and in recession. Combining these two variables, we propose to distinguish 7 subgroups of countries: from highly developed fleeing, through highly developed stable and caught up countries to the countries medium and least developed that are catching up. In part two of the article we analyze foreign direct investment (FDI) in global terms, OECD countries, and the European Union (EU); in particular we examine capital flows between the previously specified three (high, medium and least developed) groups of OECD countries. Finally, we present regression models confirming the positive feedback between FDI and economic growth. They testify to the pro-cyclical impact of foreign direct investment.

Suggested Citation

  • Marian Gorski & Patrycja Chodnicka-Jaworska, 2019. "The Process of Catching up with the Economic Development of OECD Countries and the Role of Foreign Direct Investment in this Process," Book, University of Warsaw, Faculty of Management, edition 1, volume 1, number y:2019:v:1:ch:8:p:165-186 edited by Justin Yifu Lin & Alojzy Z. Nowak, June.
    • Handle: RePEc:sgm:wnwzuw:y:2019:v:1:ch:8:p:165-186
    as

    Download full text from publisher

    File URL: http://www.wz.uw.edu.pl/portaleFiles/6133-wydawnictwo-/new_structrural_2018/Marian_Gorski,_Patrycja_Chodnicka-Jaworska.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Margarida Duarte & Diego Restuccia, 2010. "The Role of the Structural Transformation in Aggregate Productivity," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 125(1), pages 129-173.
    2. Dekle, Robert & Vandenbroucke, Guillaume, 2012. "A quantitative analysis of China's structural transformation," Journal of Economic Dynamics and Control, Elsevier, vol. 36(1), pages 119-135.
    3. Dellis, Konstantinos & Sondermann, David & Vansteenkiste, Isabel, 2017. "Determinants of FDI inflows in advanced economies: Does the quality of economic structures matter?," Working Paper Series 2066, European Central Bank.
    4. Caroline Betts & Rahul Giri & Rubina Verma, 2017. "Trade, Reform, and Structural Transformation in South Korea," IMF Economic Review, Palgrave Macmillan;International Monetary Fund, vol. 65(4), pages 745-791, November.
    5. Justin Yifu Lin, 2015. "The Washington Consensus revisited: a new structural economics perspective," Journal of Economic Policy Reform, Taylor and Francis Journals, vol. 18(2), pages 96-113, April.
    6. Rafael Cezar & Octavio Escobar, 2015. "Institutional distance and foreign direct investment," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 151(4), pages 713-733, November.
    7. Justin Yifu Lin, 2012. "New Structural Economics : A Framework for Rethinking Development and Policy," World Bank Publications - Books, The World Bank Group, number 2232, December.
    8. Justin Yifu Lin, 2015. "The Washington Consensus revisited: a new structural economics perspective," Journal of Economic Policy Reform, Taylor & Francis Journals, vol. 18(2), pages 96-113, June.
    9. Herrendorf, Berthold & Rogerson, Richard & Valentinyi, Ákos, 2014. "Growth and Structural Transformation," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 2, chapter 6, pages 855-941, Elsevier.
    10. David Lagakos & Michael E. Waugh, 2013. "Selection, Agriculture, and Cross-Country Productivity Differences," American Economic Review, American Economic Association, vol. 103(2), pages 948-980, April.
    11. Dale W. Jorgenson & Marcel P. Timmer, 2011. "Structural Change in Advanced Nations: A New Set of Stylised Facts," Scandinavian Journal of Economics, Wiley Blackwell, vol. 113(1), pages 1-29, March.
    12. Saul Estrin & Milica Uvalic, 2013. "Foreign direct investment into transition economies: Are the Balkans different?," LEQS – LSE 'Europe in Question' Discussion Paper Series 64, European Institute, LSE.
    13. Manuchehr Irandoust, 2016. "Structural changes, FDI, and economic growth: evidence from the Baltic states," Journal of Economic Structures, Springer;Pan-Pacific Association of Input-Output Studies (PAPAIOS), vol. 5(1), pages 1-9, December.
    14. Ketels Christian, 2017. "Working Paper 258 - Structural Transformation: A competitiveness-based view," Working Paper Series 2369, African Development Bank.
    15. Dale W. Jorgenson & Marcel P. Timmer, "undated". "Structural Change in Advanced Nations," Working Paper 13525, Harvard University OpenScholar.
    16. Teignier, Marc, 2018. "The role of trade in structural transformation," Journal of Development Economics, Elsevier, vol. 130(C), pages 45-65.
    17. Estrin, Saul & Uvalic, Milica, 2013. "Foreign direct investment into transition economies: are the Balkans different?," LSE Research Online Documents on Economics 53180, London School of Economics and Political Science, LSE Library.
    Full references (including those not matched with items on IDEAS)

    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. Herrendorf, Berthold & Rogerson, Richard & Valentinyi, Ákos, 2014. "Growth and Structural Transformation," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 2, chapter 6, pages 855-941, Elsevier.
    2. Cai, Wenbiao, 2015. "Structural change accounting with labor market distortions," Journal of Economic Dynamics and Control, Elsevier, vol. 57(C), pages 54-64.
    3. Sèna Kimm Gnangnon, 2020. "Comparative Advantage Following (CAF) development strategy, Aid for Trade flows and structural change in production," Journal of Economic Structures, Springer;Pan-Pacific Association of Input-Output Studies (PAPAIOS), vol. 9(1), pages 1-29, December.
    4. Fang, Lei & Herrendorf, Berthold, 2021. "High-skilled services and development in China," Journal of Development Economics, Elsevier, vol. 151(C).
    5. Murat Üngör, 2016. "Did the rising importance of services decelerate overall productivity improvement of Turkey during 2002–2007?," Journal of Economic Policy Reform, Taylor & Francis Journals, vol. 19(3), pages 238-261, July.
    6. Margarida Duarte & Diego Restuccia, 2020. "Relative Prices and Sectoral Productivity," Journal of the European Economic Association, European Economic Association, vol. 18(3), pages 1400-1443.
    7. Cynthia Armas & Fernando Sánchez-Losada, 2021. "Structural change and the income of nations," UB School of Economics Working Papers 2021/412, University of Barcelona School of Economics.
    8. Duarte, Margarida, 2020. "Manufacturing consumption, relative prices, and productivity," Journal of Macroeconomics, Elsevier, vol. 65(C).
    9. Diego Comin & Danial Lashkari & Martí Mestieri, 2021. "Structural Change With Long‐Run Income and Price Effects," Econometrica, Econometric Society, vol. 89(1), pages 311-374, January.
    10. Vanessa ALVIAREZ & CHEN Cheng & Nitya PANDALAI-NAYAR & Liliana VARELA & YI Kei-Mu & ZHANG Hongyong, 2021. "Multinationals and Structural Transformation," Discussion papers 21100, Research Institute of Economy, Trade and Industry (RIETI).
    11. Sposi, Michael, 2019. "Evolving comparative advantage, sectoral linkages, and structural change," Journal of Monetary Economics, Elsevier, vol. 103(C), pages 75-87.
    12. Li, Shang-ao & Gong, Liutang & Pan, Shan & Luo, Feng, 2020. "Wage and price differences, technology gap and labor flow dynamics," Economic Modelling, Elsevier, vol. 88(C), pages 211-222.
    13. Markus Eberhardt & Dietrich Vollrath, 2014. "Agricultural Technology and Structural Change," CSAE Working Paper Series 2014-21, Centre for the Study of African Economies, University of Oxford.
    14. Peter Bauer & Igor Fedotenkov & Aurelien Genty & Issam Hallak & Peter Harasztosi & David Martinez Turegano & David Nguyen & Nadir Preziosi & Ana Rincon-Aznar & Miguel Sanchez Martinez, 2020. "Productivity in Europe: Trends and drivers in a service-based economy," JRC Research Reports JRC119785, Joint Research Centre.
    15. Khan, Muhammad Aamir, 2020. "Cross sectoral linkages to explain structural transformation in Nepal," Structural Change and Economic Dynamics, Elsevier, vol. 52(C), pages 221-235.
    16. Tomasz Swiecki, 2017. "Determinants of Structural Change," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 24, pages 95-131, March.
    17. Afolabi Tunde Ahmed & Tsimisaraka Raymondo Sandra Marcelline & Sabi Couscous Mouhamadou Nazirou, 2021. "Empirical Study of the Impact of Governance on Economic Structural Change: Evidence from Sub-Saharan African Countries," International Journal of Science and Business, IJSAB International, vol. 5(8), pages 260-277.
    18. Zsuzsanna Novák, 2020. "Structural Change in Central and South Eastern Europe—Does Technological Efficiency Harm the Labour Market?," Sustainability, MDPI, vol. 12(11), pages 1-22, June.
    19. Till F. Hollstein & Kristian Estévez, 2017. "Industrial Policy and the Timing of Trade Liberalization," UB School of Economics Working Papers 2017/361, University of Barcelona School of Economics.
    20. Ajit K. Ghose, 2021. "Structural Change and Development in India," Indian Journal of Human Development, , vol. 15(1), pages 7-29, April.

    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:sgm:wnwzuw:y:2019:v:1:ch:8:p:165-186. 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: Tomasz Rosa (email available below). General contact details of provider: https://edirc.repec.org/data/somuwpl.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.