What is the evidence on the role of foreign direct investment in economics growth, and on the determinants of foreign direct investment flows?
AbstractFirstly I shall investigate the determinants of FDI flows and why they have supplanted other forms of foreign investment in recent years. I shall then turn to their effects on GDP growth, examining the empirical evidence in the modern form and also that of during the British empire, where its FDI was far longer lasting and substantial (relative to world GDP) than at present. I shall then suggest a simple model to explain this behaviour, and finally extract a conclusion that FDI improves GDP growth in the short term, but has a negative effect in the long term.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 13651.
Date of creation: Apr 2006
Date of revision:
foreign direct investment; GDP growth; british empire; bretton woods; imlah;
Find related papers by JEL classification:
- P45 - Economic Systems - - Other Economic Systems - - - International Linkages
- F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
- F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
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- 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.
- Eduardo Borensztein & Jose De Gregorio & Jong-Wha Lee, 1995. "How Does Foreign Direct Investment Affect Economic Growth?," NBER Working Papers 5057, National Bureau of Economic Research, Inc.
- Ian W. McLean, 2004.
"Australian Economic Growth in Historical Perspective,"
School of Economics Working Papers
2004-01, University of Adelaide, School of Economics.
- Ian W. Mclean, 2004. "Australian Economic Growth in Historical Perspective," The Economic Record, The Economic Society of Australia, vol. 80(250), pages 330-345, 09.
- Ian McLean, 2004. "Australian Economic Growth in Historical Perspective," Method and Hist of Econ Thought 0410003, EconWPA.
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