Foreign Direct Investment and Economic Growth: A Cross-Country Analysis
It is generally acknowledged that domestic investment boosts economic growth, yet the impact of foreign direct investment (FDI) is not as clear, with some studies suggesting the need for a miniumum threshold level of development in order for FDI to be beneficial. In this paper we conduct an empirical cross-country growth analysis to investigate the impact over two decades, of foreign direct investment at the aggregate level, and find that it has a significant and positive relationship with real income per capita, irrespective of any human capital requirements. An interesting observation is that the coefficient on the foreign investment variable is considerably larger than that of the domestic investment variable, suggesting a potentially large role for FDI. However, the problem of establishing the direction of causality, compounded by the unavailability of suitable instrumental variables, remains. Thus, at this point, we go no further than concluding that there is indeed, a large and positive relationship between foreign direct investment and economic growth.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Volume (Year): 5 (2005)
Issue (Month): 1 (March)
|Contact details of provider:|| Web page: https://www.degruyter.com|
|Order Information:||Web: https://www.degruyter.com/view/j/gej|
When requesting a correction, please mention this item's handle: RePEc:bpj:glecon:v:5:y:2005:i:1:n:8. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Peter Golla)
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 references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link 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 profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.