How Does FDI and Economic Growth Affect Each Other? The OECD Case
In: Proceedings of the Conference on Emerging Economic Issues in a Globalizing World
This paper tests the endogenous relationship between FDI and economic growth using a panel dataset for 23 OECD countries for the period 1975-2004. Following the literature, we treat economic growth and FDI as endogenous variables, and estimate a two-equation simultaneous equation system with the generalized methods of moments (GMM) for the OECD case. We find that FDI and growth are important determinants of for each other. We also find that export growth rate is statistically significant determinant of FDI and economic growth. Our results indicate that there is an endogenous relationship between FDI and economic growth.
|This chapter was published in: ||This item is provided by Izmir University of Economics in its series Papers of the Annual IUE-SUNY Cortland Conference in Economics with number
200802.||Handle:|| RePEc:izm:prcdng:200802||Contact details of provider:|| Fax: (90) 232 279 2626|
Web page: http://eco.ieu.edu.tr
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Berthelemy, Jean-Claude & Demurger, Sylvie, 2000. "Foreign Direct Investment and Economic Growth: Theory and Application to China," Review of Development Economics, Wiley Blackwell, vol. 4(2), pages 140-55, June.
- KH Zhang, 2001. "Does Foreign Direct Investment Promote Economic Growth? Evidence From East Asia And Latin America," Contemporary Economic Policy, Western Economic Association International, vol. 19(2), pages 175-185, 04.
- V. N. Balasubramanyam & M. Salisu & David Sapsford, 1999. "Foreign direct investment as an engine of growth," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 8(1), pages 27-40.
- Borensztein, E. & De Gregorio, J. & Lee, J-W., 1998.
"How does foreign direct investment affect economic growth?1,"
Journal of International Economics,
Elsevier, vol. 45(1), pages 115-135, June.
- Eduardo Borensztein & Jose De Gregorio & Jong-Wha Lee, 1995. "How Does Foreign Direct Investment Affect Economic Growth?," NBER Working Papers 5057, National Bureau of Economic Research, Inc.
- Papanek, Gustav F, 1973. "Aid, Foreign Private Investment, Savings, and Growth in Less Developed Countries," Journal of Political Economy, University of Chicago Press, vol. 81(1), pages 120-30, Jan.-Feb..
- Niels Hermes & Robert Lensink, 2003.
"Foreign direct investment, financial development and economic growth,"
Journal of Development Studies,
Taylor & Francis Journals, vol. 40(1), pages 142-163.
- Hermes, Niels & Lensink, Robert, 2000. "Foreign direct investment, financial development and economic growth," Research Report 00E27, University of Groningen, Research Institute SOM (Systems, Organisations and Management).
- Anderson, James E, 1979. "A Theoretical Foundation for the Gravity Equation," American Economic Review, American Economic Association, vol. 69(1), pages 106-16, March.
- Basu, Parantap & Guariglia, Alessandra, 2007. "Foreign Direct Investment, inequality, and growth," Journal of Macroeconomics, Elsevier, vol. 29(4), pages 824-839, December.
- Henrik Hansen & John Rand, 2006.
"On the Causal Links Between FDI and Growth in Developing Countries,"
The World Economy,
Wiley Blackwell, vol. 29(1), pages 21-41, 01.
- Hansen, Henrik & Rand, John, 2005. "On the Causal Links between FDI and Growth in Developing Countries," Working Paper Series RP2005/31, World Institute for Development Economic Research (UNU-WIDER).
- Henrik Hansen & John Rand, 2004. "On the Causal Links between FDI and Growth in Developing Countries," Discussion Papers 04-30, University of Copenhagen. Department of Economics.
- Sebnem Kalemli-Ozcan & Laura Alfaro & Selin Sayek & Areendam Chanda, 2002.
"FDI and Economic Growth: The Role of Local Financial Markets,"
- Alfaro, Laura & Chanda, Areendam & Kalemli-Ozcan, Sebnem & Sayek, Selin, 2004. "FDI and economic growth: the role of local financial markets," Journal of International Economics, Elsevier, vol. 64(1), pages 89-112, October.
- Li, Xiaoying & Liu, Xiaming, 2005. "Foreign Direct Investment and Economic Growth: An Increasingly Endogenous Relationship," World Development, Elsevier, vol. 33(3), pages 393-407, March.
- Durham, J.B.J. Benson, 2004. "Absorptive capacity and the effects of foreign direct investment and equity foreign portfolio investment on economic growth," European Economic Review, Elsevier, vol. 48(2), pages 285-306, April.
- de Mello, Luiz R, Jr, 1999.
"Foreign Direct Investment-Led Growth: Evidence from Time Series and Panel Data,"
Oxford Economic Papers,
Oxford University Press, vol. 51(1), pages 133-51, January.
- L.R. de Mello Jr., 1996. "Foreign Direct Investment-Led Growth: Evidence from Time Series and Panel Data," Studies in Economics 9615, School of Economics, University of Kent.
- Parantap Basu & Chandana Chakraborty & Derrick Reagle, 2003. "Liberalization, FDI, and Growth in Developing Countries: A Panel Cointegration Approach," Economic Inquiry, Western Economic Association International, vol. 41(3), pages 510-516, July.
- V N Balasubramanyam & M Salisu & David Sapsford., .
"Foreign Direct Investment and Growth in EP and IS Countries,"
ec18/94, Department of Economics, University of Lancaster.
- Balasubramanyam, V N & Salisu, M & Sapsford, David, 1996. "Foreign Direct Investment and Growth in EP and IS Countries," Economic Journal, Royal Economic Society, vol. 106(434), pages 92-105, January.
- Hsiao, Frank S.T. & Hsiao, Mei-Chu W., 2006. "FDI, exports, and GDP in East and Southeast Asia--Panel data versus time-series causality analyses," Journal of Asian Economics, Elsevier, vol. 17(6), pages 1082-1106, December.
- Bengoa, Marta & Sanchez-Robles, Blanca, 2003. "Foreign direct investment, economic freedom and growth: new evidence from Latin America," European Journal of Political Economy, Elsevier, vol. 19(3), pages 529-545, September.
When requesting a correction, please mention this item's handle: RePEc:izm:prcdng:200802. 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: (Ayla Ogus Binatli)
If references are entirely missing, you can add them using this form.