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Foreign Direct Investment And Economic Growth: The Growth Accounting Perspective

Author

Listed:
  • MIAO WANG
  • M. C. SUNNY WONG

Abstract

"A positive relationship between FDI and economic growth under two economic conditions has been estimated: a sufficient level of human capital and well-developed financial markets, respectively. However, these two conditions can be fundamentally different catalysts for FDI to promote economic growth in the perspective of growth accounting. Using data from 69 countries over 1970-1989, we find that FDI promotes productivity growth only when the host country reaches a threshold level of human capital; and FDI promotes capital growth only when a certain level of financial development is achieved." ("JEL" F21) Copyright (c) 2008 Western Economic Association International.

Suggested Citation

  • Miao Wang & M. C. Sunny Wong, 2009. "Foreign Direct Investment And Economic Growth: The Growth Accounting Perspective," Economic Inquiry, Western Economic Association International, vol. 47(4), pages 701-710, October.
  • Handle: RePEc:bla:ecinqu:v:47:y:2009:i:4:p:701-710
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Dierk Herzer, 2017. "The long-run effect of FDI on TFP in the United States," Economics Bulletin, AccessEcon, vol. 37(1), pages 568-578.
    2. Archawa Paweenawat & Thitima Chucherd & Nakarin Amarase, 2017. "Uncovering Productivity Puzzles in Thailand: Lessons from Microdata," PIER Discussion Papers 73, Puey Ungphakorn Institute for Economic Research, revised Oct 2017.
    3. Biró, Flóra Panna & Márkus, Ádám & Erdey, László, 2016. "A kormányzás hatása a közvetlen külföldi tőkebefektetésekre Latin-Amerikában," MPRA Paper 80025, University Library of Munich, Germany.
    4. Mina, Wasseem & Jaeck, Louis, 2015. "Labor Market Flexibility and FDI Flows: Evidence from Oil-Rich GCC and Middle Income Countries," MPRA Paper 62652, University Library of Munich, Germany.
    5. Gulcin Elif Yucel, 2014. "FDI and Economic Growth: The Case of Baltic Countries," Research in World Economy, Research in World Economy, Sciedu Press, vol. 5(2), pages 115-134, September.
    6. Ashraf, Ayesha & Herzer, Dierk & Nunnenkamp, Peter, 2014. "The Effects of Greenfield FDI and Cross-border M&As on Total Factor Productivity," MPRA Paper 65060, University Library of Munich, Germany, revised 17 Mar 2015.
    7. Rajneesh Narula & André Pineli, 2016. "Multinational Enterprises and Economic Development in Host Countries: What We Know and What We Don’t Know," John H Dunning Centre for International Business Discussion Papers jhd-dp2016-01, Henley Business School, Reading University.
    8. repec:gam:jsusta:v:9:y:2017:i:6:p:933-:d:100350 is not listed on IDEAS
    9. Yi Che & Danny T. Wang, 2013. "Multinationals, Institutions and Economic Growth in China," Asian Economic Journal, East Asian Economic Association, vol. 27(1), pages 1-16, March.
    10. repec:kap:ecopln:v:50:y:2017:i:4:d:10.1007_s10644-016-9191-0 is not listed on IDEAS
    11. Kim, Dong-Hyeon & Lin, Shu-Chin & Suen, Yu-Bo, 2013. "Investment, trade openness and foreign direct investment: Social capability matters," International Review of Economics & Finance, Elsevier, vol. 26(C), pages 56-69.
    12. repec:bla:worlde:v:39:y:2016:i:11:p:1728-1755 is not listed on IDEAS

    More about this item

    JEL classification:

    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements

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