Firstly 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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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number
13651.
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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