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Foreign Direct Investment as Technology Transferred: Some Panel Evidence from the Transition Economies

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  • Campos, Nauro F
  • Kinoshita, Yuko

Abstract

Although the theoretical literature has identified various sizeable benefits from foreign direct investment inflows (FDI), the empirical literature has been unable to establish a positive and significant impact of FDI on the rates of economic growth of host countries. One reason for this difficulty is that theory equates FDI to technology transferred, while in most countries and regions of the world FDI encompasses an array of arrangements that goes well beyond pure technology transfer. This Paper tests for the effects of FDI on growth in a set of countries in which FDI is pure technology transfer: the 25 Central and Eastern European and former Soviet Union transition countries between 1990-98. Our main finding is that, in this more appropriate setting, FDI has a positive and significant impact on economic growth as theory predicts.

Suggested Citation

  • Campos, Nauro F & Kinoshita, Yuko, 2002. "Foreign Direct Investment as Technology Transferred: Some Panel Evidence from the Transition Economies," CEPR Discussion Papers 3417, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:3417
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    References listed on IDEAS

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    1. Nauro F. Campos & Abrizio Coricelli, 2002. "Growth in Transition: What We Know, What We Don't, and What We Should," Journal of Economic Literature, American Economic Association, vol. 40(3), pages 793-836, September.
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    7. Magnus Blomstrom, 1991. "Host Country Benefits of Foreign Investment," NBER Working Papers 3615, National Bureau of Economic Research, Inc.
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    9. Ratna Sahay & Jeronimo Zettelmeyer & Eduardo Borensztein & Andrew Berg, 1999. "The Evolution of Output in Transition Economies; Explaining the Differences," IMF Working Papers 99/73, International Monetary Fund.
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    More about this item

    Keywords

    economic growth; foreign direct investment; transition economies;

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • O23 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Fiscal and Monetary Policy in Development
    • P27 - Economic Systems - - Socialist Systems and Transition Economies - - - Performance and Prospects

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