IDEAS home Printed from https://ideas.repec.org/p/pra/mprapa/3563.html
   My bibliography  Save this paper

Foreign Direct Investment And Economic Growth: Some Evidence From Across The World

Author

Listed:
  • Halicioglu, Anita
  • Halicioglu, Ferda

Abstract

This study is concerned about foreign direct investment (FDI) and economic growth across the world for the period of 1991-2001. This article produces fresh empirical evidence on the relation between FDI and economic growth obtained from single-equation and simultaneous equation estimates for 140 countries using macro economic variables. The results indicate that a positive and statistically significant estimate of coefficient of FDI is obtained from single equation ordinary least squares method for real per-capita GDP regressions in all but one case. There exists a positive and statistically significant relation between the real per-capita GDP and FDI in the case of many countries but correlation coefficient between exports-GDP ratio and percentage FDI is found to be insignificant. Country risk rating and the telecommunications variables are significant in all the relevant regressions and correlation estimates.

Suggested Citation

  • Halicioglu, Anita & Halicioglu, Ferda, 2006. "Foreign Direct Investment And Economic Growth: Some Evidence From Across The World," MPRA Paper 3563, University Library of Munich, Germany, revised 2007.
  • Handle: RePEc:pra:mprapa:3563
    as

    Download full text from publisher

    File URL: https://mpra.ub.uni-muenchen.de/3563/1/MPRA_paper_3563.pdf
    File Function: original version
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. 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.
    2. Caves, Richard E, 1971. "International Corporations: The Industrial Economics of Foreign Investment," Economica, London School of Economics and Political Science, vol. 38(149), pages 1-27, February.
    3. Sims, Christopher A, 1980. "Macroeconomics and Reality," Econometrica, Econometric Society, vol. 48(1), pages 1-48, January.
    4. Romer, Paul M, 1990. "Endogenous Technological Change," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages 71-102, October.
    5. Ghatak, A., 1997. "Vector Autoregression Modelling and Forecasting Growth of South Korea," Department of Economics, De Montford University 97-02, Department of Economics, De Montfort University.
    6. Anita Ghatak, 1998. "Vector autoregression modelling and forecasting growth of South Korea," Journal of Applied Statistics, Taylor & Francis Journals, vol. 25(5), pages 579-592, June.
    7. Blomstrom, Magnus, 1986. "Foreign Investment and Productive Efficiency: The Case of Mexico," Journal of Industrial Economics, Wiley Blackwell, vol. 35(1), pages 97-110, September.
    8. 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.
    9. Bruno, Michael & Easterly, William, 1998. "Inflation crises and long-run growth," Journal of Monetary Economics, Elsevier, vol. 41(1), pages 3-26, February.
    10. Root, Franklin R & Ahmed, Ahmed A, 1979. "Empirical Determinants of Manufacturing Direct Foreign Investment in Developing Countries," Economic Development and Cultural Change, University of Chicago Press, vol. 27(4), pages 751-767, July.
    11. Gupta, Vinod K, 1983. "A Simultaneous Determination of Structure, Conduct and Performance in Canadian Manufacturing," Oxford Economic Papers, Oxford University Press, vol. 35(2), pages 281-301, July.
    12. Romita Biswas, 2002. "Determinants of Foreign Direct Investment," Review of Development Economics, Wiley Blackwell, vol. 6(3), pages 492-504, October.
    13. Kevin Sylwester, 2005. "Foreign direct investment, growth and income inequality in less developed countries," International Review of Applied Economics, Taylor & Francis Journals, vol. 19(3), pages 289-300.
    14. Ewe-Ghee Lim, 2001. "Determinants of, and the Relation Between, Foreign Direct Investment and Growth; A Summary of the Recent Literature," IMF Working Papers 2001/175, International Monetary Fund.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Acaravci, Ali & Ozturk, Ilhan, 2012. "Foreign Direct Investment, Export and Economic Growth: Empirical Evidence from New EU Countries," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(2), pages 52-67, June.
    2. Bulent Esiyok, 2015. "Does Inward Foreign Direct Investment Increase Imports To Turkey? An Instrumental Variables Approach," Journal Articles, Center For Economic Analyses, pages 23-35, June.
    3. Gulcin Elif Yucel, 2014. "FDI and Economic Growth: The Case of Baltic Countries," Research in World Economy, Research in World Economy, Sciedu Press, vol. 5(2), pages 115-134, September.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Lee, Jong-Wha & Shin, Kwanho, 2012. "Welfare implications of international financial integration," Japan and the World Economy, Elsevier, vol. 24(4), pages 235-245.
    2. Muhammad Arshad Khan, 2007. "Foreign Direct Investment and Economic Growth: The Role of Domestic Financial Sector," PIDE-Working Papers 2007:18, Pakistan Institute of Development Economics.
    3. Della Temenggung, 2007. "Productivity Spillovers from Foreign Direct Investment: Indonesian Manufacturing Industry’s Experience 1975-2000," DEGIT Conference Papers c012_048, DEGIT, Dynamics, Economic Growth, and International Trade.
    4. Beugelsdijk, Sjoerd & Smeets, Roger & Zwinkels, Remco, 2008. "The impact of horizontal and vertical FDI on host's country economic growth," International Business Review, Elsevier, vol. 17(4), pages 452-472, August.
    5. Rosemary Stanley Taylor, 2020. "Foreign direct investment and economic growth. Analysis of sectoral foreign direct investment in Tanzania," African Development Review, African Development Bank, vol. 32(4), pages 699-717, December.
    6. Mico Apostolov, 2016. "Cobb–Douglas production function on FDI in Southeast Europe," Journal of Economic Structures, Springer;Pan-Pacific Association of Input-Output Studies (PAPAIOS), vol. 5(1), pages 1-28, December.
    7. Blomström, Magnus & Kokko, Ari, 2003. "Human Capital and Inward FDI," CEPR Discussion Papers 3762, C.E.P.R. Discussion Papers.
    8. Delgado, Michael S. & McCloud, Nadine & Kumbhakar, Subal C., 2014. "A generalized empirical model of corruption, foreign direct investment, and growth," Journal of Macroeconomics, Elsevier, vol. 42(C), pages 298-316.
    9. Shaukat, Badiea & Zhu, Qigui & Khan, M. Ijaz, 2019. "Real interest rate and economic growth: A statistical exploration for transitory economies," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 534(C).
    10. Dierk Herzer & Stephan Klasen & Felicitas Nowak-Lehmann D., 2006. "In search of FDI-led growth in developing countries," Ibero America Institute for Econ. Research (IAI) Discussion Papers 150, Ibero-America Institute for Economic Research.
    11. Jan Babecký & Aleš Bulíř & Kateřina šmídková, 2009. "Sustainable real exchange rates in the new EU Member States: Is FDI a mixed blessing?," European Economy - Economic Papers 2008 - 2015 368, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
    12. Marasco, Antonio, 2002. "High tech foreign direct investment and its impact on economic development," MPRA Paper 5390, University Library of Munich, Germany, revised Apr 2005.
    13. Gál, Zoltán, 2019. "Az FDI szerepe a gazdasági növekedés és a beruházások területi differenciálódásában Magyarországon [The foreign direct investment role in Hungarys economic growth and territorial differentiation of," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(6), pages 653-686.
    14. Gould, David M. & Panterov, Georgi, 2017. "Multidimensional connectivity: Why the interplay of international connections matters for knowledge transfers," Journal of Policy Modeling, Elsevier, vol. 39(4), pages 699-711.
    15. Roghieh Gholami & Sang‐Yong Tom Lee & Almas Heshmati, 2006. "The Causal Relationship Between Information and Communication Technology and Foreign Direct Investment," The World Economy, Wiley Blackwell, vol. 29(1), pages 43-62, January.
    16. Silvio Traverso & Guido Bonatti, 2015. "Education and FDI: An Insight from US Outflows," Journal of Social Economics, Research Academy of Social Sciences, vol. 2(3), pages 101-116.
    17. Harrison, Ann & Rodríguez-Clare, Andrés, 2010. "Trade, Foreign Investment, and Industrial Policy for Developing Countries," Handbook of Development Economics, in: Dani Rodrik & Mark Rosenzweig (ed.), Handbook of Development Economics, edition 1, volume 5, chapter 0, pages 4039-4214, Elsevier.
    18. Dalila NICET-CHENAF & Eric ROUGIER, 2009. "FDI and growth: A new look at a still puzzling issue," Cahiers du GREThA (2007-2019) 2009-13, Groupe de Recherche en Economie Théorique et Appliquée (GREThA).
    19. Damijan, Jože P. & Kostevc, Crt, 2007. "Knowledge Transfer, Innovation and Growth," Papers DYNREG06, Economic and Social Research Institute (ESRI).
    20. Dalila NICET- CHENAF (GREThA-GRES) & Eric ROUGIER (GREThA-GRES), 2008. "Recent exports matter: export discoveries, FDI and Growth, an empirical assessment for MENA countries," Cahiers du GRES (2002-2009) 2008-17, Groupement de Recherches Economiques et Sociales.

    More about this item

    Keywords

    Foreign direct investment; multinational corporations; composite risk rating; instrumental variable method; omitted variable method; simultaneous equation method;
    All these keywords.

    JEL classification:

    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • F15 - International Economics - - Trade - - - Economic Integration

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:3563. 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: (Joachim Winter). General contact details of provider: https://edirc.repec.org/data/vfmunde.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.