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Foreign Direct Investments, Technology Transfer and Economic Growth. A Panel Approach

  • Hudea Caraman, Oana Simona

    ()

    (Academy of Economic Studies, Bucharest)

  • Stancu, Stelian

    ()

    (Academy of Economic Studies, Bucharest)

Registered author(s):

    This paper calls into question the existing of a direct and positive impact of foreign direct investments on economic growth. Considering that many controversial results have been caused by the use of cross-country or time-series investigations that do not reveal all facets of this complex issue, we resorted to panel data, thus capturing the continuously evolving country-specific differences. Our study, made on seven East- European countries, during 1993-2009, is based on panel OLS / GMM fixed and random effect estimations, panel cointegration and causality analysis. The results not only reveal a direct and positive influence of foreign direct investments on gross domestic product, both in the short and in the long-run, therefore reducing the technological gap with more developed countries, but they also render a reverse causality running from GDP to FDI.

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    File URL: http://www.ipe.ro/rjef/rjef2_12/rjef2_2012p85-102.pdf
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    Article provided by Institute for Economic Forecasting in its journal Romanian Journal for Economic Forecasting.

    Volume (Year): (2012)
    Issue (Month): 2 (June)
    Pages: 85-102

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    Handle: RePEc:rjr:romjef:v::y:2012:i:2:p:85-102
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    11. Maddala, G S & Wu, Shaowen, 1999. " A Comparative Study of Unit Root Tests with Panel Data and a New Simple Test," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 61(0), pages 631-52, Special I.
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