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Revisiting the dynamic effect of foreign direct investment on economic growth in LDCs

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  • Md. Al Mamun
  • Kazi Sohag

Abstract

The relationship between foreign direct investment (FDI) and gross domestic product (GDP) has long been considered as an unresolved debate in growth literature. Scores of studies have highlighted ambiguous conclusion regarding the exact effect of FDI on economic growth among the recipient countries. Though transfers of technologies, development of financial sectors across the world including in the LDCs have promised a positive role of FDI in the LDCs, however, lack of transparency, accountability, widespread corruption including the motivation of the MNCs have always clouded the outcome. Using most robust methodologies for panel data, this study concludes that LDCs thrive towards growth appetite can very little be fulfilled with FDI, rather domestic fixed capital formulation, efficient use of the existing abundant labour force can foster the economic growth much aggressively even in the long run.

Suggested Citation

  • Md. Al Mamun & Kazi Sohag, 2015. "Revisiting the dynamic effect of foreign direct investment on economic growth in LDCs," International Journal of Economic Policy in Emerging Economies, Inderscience Enterprises Ltd, vol. 8(2), pages 97-118.
    • Handle: RePEc:ids:ijepee:v:8:y:2015:i:2:p:97-118
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    Citations

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    Cited by:

    1. Irina A. Morozova & Elena G. Popkova & Tatiana N. Litvinova, 2019. "Sustainable development of global entrepreneurship: infrastructure and perspectives," International Entrepreneurship and Management Journal, Springer, vol. 15(2), pages 589-597, June.
    2. Natalia G. Vovchenko & Olga B. Ivanova & Elena D. Kostoglodova & Marina O. Otrishko & Olga S. Dzhu, 2016. "Innovations and Fighting Global Economic Problems," Contemporary Economics, University of Economics and Human Sciences in Warsaw., vol. 10(4), December.
    3. Nahla Samargandi & Mohammed A. Alghfais & Hadeel M. AlHuthail, 2022. "Factors in Saudi FDI Inflow," SAGE Open, , vol. 12(1), pages 21582440211, January.
    4. Waqar Ameer & Helian Xu & Kazi Sohag & Syed Hasanat Shah, 2021. "Outflow FDI and Domestic Investment: Aggregated and Disaggregated Analysis," Sustainability, MDPI, vol. 13(13), pages 1-19, June.
    5. Elena Popkova & Oksana Chechina & Aleksandra Sultanova, 2016. "Structural and Logical Model of Contemporary Global Economic System," European Research Studies Journal, European Research Studies Journal, vol. 0(2), pages 218-227.
    6. Svetlana G. Vokina & Yulia S. Zima & Nikolai G. Sinyavsky & Vadim Meshkov & Aleksandra V. Sultanova, 2016. "Unification of Economic Systems in the Global Economy: Barriers and Preconditions," Contemporary Economics, University of Economics and Human Sciences in Warsaw., vol. 10(4), December.

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