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FDI, natural resource and economic growth: A Threshold model approach

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  • Hayat, Arshad
  • Cahlik, Tomas

Abstract

In this article, we present analyses of the link between natural resources, FDI, and economic growth. We use the Fixed Effect Threshold Model for panel data with annual frequency for 83 countries. Our results show that FDI has a strong positive impact on the economic growth of the host country if the host country’s natural resources export is below the statistically significant estimated threshold. However, this FDI-induced economic growth is watered-down if the countries natural resources export is larger than the estimated threshold. The results are robust for alternative indicators of natural resources, i.e., natural resources rents.

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  • Hayat, Arshad & Cahlik, Tomas, 2017. "FDI, natural resource and economic growth: A Threshold model approach," MPRA Paper 100271, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:100271
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    Keywords

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    JEL classification:

    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • P28 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Natural Resources; Environment
    • P45 - Political Economy and Comparative Economic Systems - - Other Economic Systems - - - International Linkages

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