What is the evidence on the role of foreign direct investment in economics growth, and on the determinants of foreign direct investment flows?
Firstly I shall investigate the determinants of FDI flows and why they have supplanted other forms of foreign investment in recent years. I shall then turn to their effects on GDP growth, examining the empirical evidence in the modern form and also that of during the British empire, where its FDI was far longer lasting and substantial (relative to world GDP) than at present. I shall then suggest a simple model to explain this behaviour, and finally extract a conclusion that FDI improves GDP growth in the short term, but has a negative effect in the long term.
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- Ian W. McLean, 2004.
"Australian Economic Growth in Historical Perspective,"
School of Economics Working Papers
2004-01, University of Adelaide, School of Economics.
- Ian W. Mclean, 2004. "Australian Economic Growth in Historical Perspective," The Economic Record, The Economic Society of Australia, vol. 80(250), pages 330-345, 09.
- Ian McLean, 2004. "Australian Economic Growth in Historical Perspective," Method and Hist of Econ Thought 0410003, EconWPA.
- 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.
- 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.
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