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FDI and Economic Growth: The Role of Natural Resources

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  • Hayat, Arshad

Abstract

In the paper, I explored links between inflow of FDI, natural resource abundance and economic growth. Natural resource abundance is considered to slow down the economic growth. The paper explores if the natural resource abundance reduce the FDI induced growth in the host country. Using panel data for a sample of 106 countries for the period 1993-2012, the paper conclude FDI inflow accelerates economic growth of the host country. However, the presence of natural resources slows down the FDI induced growth.

Suggested Citation

  • Hayat, Arshad, 2014. "FDI and Economic Growth: The Role of Natural Resources," MPRA Paper 57021, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:57021
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    References listed on IDEAS

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    1. Steven Poelhekke & Frederick van der Ploeg, 2013. "Do Natural Resources Attract Nonresource FDI?," The Review of Economics and Statistics, MIT Press, vol. 95(3), pages 1047-1065, July.
    2. 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.
    3. Cameron,A. Colin & Trivedi,Pravin K., 2005. "Microeconometrics," Cambridge Books, Cambridge University Press, number 9780521848053.
    4. Havranek, Tomas & Irsova, Zuzana, 2011. "Estimating vertical spillovers from FDI: Why results vary and what the true effect is," Journal of International Economics, Elsevier, vol. 85(2), pages 234-244.
    5. Kottaridi, Constantina & Stengos, Thanasis, 2010. "Foreign direct investment, human capital and non-linearities in economic growth," Journal of Macroeconomics, Elsevier, vol. 32(3), pages 858-871, September.
    6. De Rosa, Donato & Iootty, Mariana, 2012. "Are natural resources cursed ? an investigation of the dynamic effects of resource dependence on institutional quality," Policy Research Working Paper Series 6151, The World Bank.
    7. 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.
    8. Filippo Reganati & Rosanna Pittiglio & Edgardo Sica, 2008. "Horizontal And Vertical Spillovers From Fdi In The Italian Productive System," Quaderni DSEMS 08-2008, Dipartimento di Scienze Economiche, Matematiche e Statistiche, Universita' di Foggia.
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    Cited by:

    1. hayat, arshad, 2017. "FDI and economic growth: Evidence on the Role of the Size of Natural Resource Sector," MPRA Paper 76205, University Library of Munich, Germany.
    2. repec:asi:ijoass:2018:p:1027-1038 is not listed on IDEAS
    3. repec:spr:eurasi:v:8:y:2018:i:4:d:10.1007_s40821-017-0095-3 is not listed on IDEAS
    4. Hayat, Arshad & Cahlik, Tomas, 2017. "FDI and Economic Growth: A Changing Relationship Across Country and Overtime," MPRA Paper 78240, University Library of Munich, Germany.

    More about this item

    Keywords

    Foreign Direct Investment; Economic Growth; Natural Resources; Resource Curse; Hausman Test;

    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity
    • Q0 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General

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