IDEAS home Printed from https://ideas.repec.org/p/pum/wpaper/2014-04.html
   My bibliography  Save this paper

The Impact of Foreign Direct Investment on Economic Growth – An Empirical Analysis of Different Effects in Less and More Developed Countries

Author

Listed:
  • Thomas Brenner

    (Economic Geography and Location Research, Philipps-University, Marburg)

Abstract

This paper studies the effects of foreign direct investment (FDI) on national economic growth with the help of GMM panel regressions. Effects on productivity growth, capital and labor inputs as well as innovation activities are distinguished. Furthermore, less and more developed countries as well as the time periods 1974-1991 and 1992-2009 are studied separately. Effects of FDI on production capacities are found for more developed countries in the first time period, while effects on innovation activities are found for the medium developed countries in the latter time period. Effects in less developed countries are rather negative.

Suggested Citation

  • Thomas Brenner, 2014. "The Impact of Foreign Direct Investment on Economic Growth – An Empirical Analysis of Different Effects in Less and More Developed Countries," Working Papers on Innovation and Space 2014-05, Philipps University Marburg, Department of Geography.
    • Handle: RePEc:pum:wpaper:2014-04
    as

    Download full text from publisher

    File URL: https://repec.geographie.uni-marburg.de/pum/wpaper/wp0514.pdf
    File Function: Full text
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Riccardo Cappelli & Fabio Montobbio, 2016. "European Integration and Knowledge Flows across European Regions," Regional Studies, Taylor & Francis Journals, vol. 50(4), pages 709-727, April.
    2. Luigi Aldieri & Michele Cincera, 2009. "Geographic and technological R&D spillovers within the triad: micro evidence from US patents," The Journal of Technology Transfer, Springer, vol. 34(2), pages 196-211, April.
    3. Michael Storper & Anthony J. Venables, 2004. "Buzz: face-to-face contact and the urban economy," Journal of Economic Geography, Oxford University Press, vol. 4(4), pages 351-370, August.
    4. Corinne Autant‐Bernard & Pascal Billand & David Frachisse & Nadine Massard, 2007. "Social distance versus spatial distance in R&D cooperation: Empirical evidence from European collaboration choices in micro and nanotechnologies," Papers in Regional Science, Wiley Blackwell, vol. 86(3), pages 495-519, August.
    5. Jarno Hoekman & Koen Frenken & Frank Oort, 2009. "The geography of collaborative knowledge production in Europe," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 43(3), pages 721-738, September.
    6. Hoekman, Jarno & Frenken, Koen & Tijssen, Robert J.W., 2010. "Research collaboration at a distance: Changing spatial patterns of scientific collaboration within Europe," Research Policy, Elsevier, vol. 39(5), pages 662-673, June.
    7. James P. LeSage & Manfred M. Fischer & Thomas Scherngell, 2007. "Knowledge spillovers across Europe: Evidence from a Poisson spatial interaction model with spatial effects," Papers in Regional Science, Wiley Blackwell, vol. 86(3), pages 393-421, August.
    8. Tom Broekel & Martin Binder, 2007. "The Regional Dimension of Knowledge Transfers—A Behavioral Approach," Industry and Innovation, Taylor & Francis Journals, vol. 14(2), pages 151-175.
    9. Thomas Scherngell & Yuanjia Hu, 2011. "Collaborative Knowledge Production in China: Regional Evidence from a Gravity Model Approach," Regional Studies, Taylor & Francis Journals, vol. 45(6), pages 755-772.
    10. Michael Fritsch & Viktor Slavtchev, 2007. "Universities and Innovation in Space," Industry and Innovation, Taylor & Francis Journals, vol. 14(2), pages 201-218.
    11. Nooteboom, Bart & Van Haverbeke, Wim & Duysters, Geert & Gilsing, Victor & van den Oord, Ad, 2007. "Optimal cognitive distance and absorptive capacity," Research Policy, Elsevier, vol. 36(7), pages 1016-1034, September.
    12. Katz, J. Sylvan & Martin, Ben R., 1997. "What is research collaboration?," Research Policy, Elsevier, vol. 26(1), pages 1-18, March.
    13. Choi, David & Valikangas, Liisa, 2001. "Patterns of strategy innovation," European Management Journal, Elsevier, vol. 19(4), pages 424-429, August.
    14. Zoltan J. Acs & Luc Anselin & Attila Varga, 2008. "Patents and Innovation Counts as Measures of Regional Production of New Knowledge," Chapters, in: Entrepreneurship, Growth and Public Policy, chapter 11, pages 135-151, Edward Elgar Publishing.
    15. Mario Maggioni & Teodora Uberti, 2009. "Knowledge networks across Europe: which distance matters?," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 43(3), pages 691-720, September.
    16. Picci, Lucio, 2010. "The internationalization of inventive activity: A gravity model using patent data," Research Policy, Elsevier, vol. 39(8), pages 1070-1081, October.
    17. Andre Torre, 2008. "On the Role Played by Temporary Geographical Proximity in Knowledge Transmission," Regional Studies, Taylor & Francis Journals, vol. 42(6), pages 869-889.
    18. Gomes-Casseres, Benjamin & Hagedoorn, John & Jaffe, Adam B., 2006. "Do alliances promote knowledge flows?," Journal of Financial Economics, Elsevier, vol. 80(1), pages 5-33, April.
    19. Corinne Autant-Bernard, 2001. "The Geography Of Knowledge Spillovers And Technological Proximity," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 10(4), pages 237-254.
    20. Morescalchi, Andrea & Pammolli, Fabio & Penner, Orion & Petersen, Alexander M. & Riccaboni, Massimo, 2015. "The evolution of networks of innovators within and across borders: Evidence from patent data," Research Policy, Elsevier, vol. 44(3), pages 651-668.
    21. Lori Rosenkopf & Paul Almeida, 2003. "Overcoming Local Search Through Alliances and Mobility," Management Science, INFORMS, vol. 49(6), pages 751-766, June.
    22. Breschi, Stefano & Lissoni, Francesco & Malerba, Franco, 2003. "Knowledge-relatedness in firm technological diversification," Research Policy, Elsevier, vol. 32(1), pages 69-87, January.
    23. Rafael Lata & Thomas Scherngell & Thomas Brenner, 2012. "Integration Processes in European R&D: A comparative spatial interaction approach using project based R&D networks, co-publication networks and co-patent networks," ERSA conference papers ersa12p836, European Regional Science Association.
    24. Stefano Breschi & Francesco Lissoni, 2009. "Mobility of skilled workers and co-invention networks: an anatomy of localized knowledge flows," Journal of Economic Geography, Oxford University Press, vol. 9(4), pages 439-468, July.
    25. Ron Boschma, 2005. "Proximity and Innovation: A Critical Assessment," Regional Studies, Taylor & Francis Journals, vol. 39(1), pages 61-74.
    26. Alan L. Porter & Ismael Rafols, 2009. "Is science becoming more interdisciplinary? Measuring and mapping six research fields over time," Scientometrics, Springer;Akadémiai Kiadó, vol. 81(3), pages 719-745, December.
    27. Thomas Scherngell & Michael Barber, 2011. "Distinct spatial characteristics of industrial and public research collaborations: evidence from the fifth EU Framework Programme," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 46(2), pages 247-266, April.
    28. Maurseth, Per Botolf & Verspagen, Bart, 2002. " Knowledge Spillovers in Europe: A Patent Citations Analysis," Scandinavian Journal of Economics, Wiley Blackwell, vol. 104(4), pages 531-545, December.
    29. Per Botolf Maurseth & Bart Verspagen, 2002. "Knowledge Spillovers in Europe: A Patent Citations Analysis," Scandinavian Journal of Economics, Wiley Blackwell, vol. 104(4), pages 531-545, December.
    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. Ziberi Besime & Alili Merita Zulfiu, 2021. "Economic Growth in the Western Balkans: A Panel Analysis," South East European Journal of Economics and Business, Sciendo, vol. 16(2), pages 68-81, December.

    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. Rafael Lata & Sidonia Proff & Thomas Brenner, 2018. "The influence of distance types on co-patenting and co-publishing in the USA and Europe over time," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 61(1), pages 49-71, July.
    2. Morescalchi, Andrea & Pammolli, Fabio & Penner, Orion & Petersen, Alexander M. & Riccaboni, Massimo, 2015. "The evolution of networks of innovators within and across borders: Evidence from patent data," Research Policy, Elsevier, vol. 44(3), pages 651-668.
    3. Laurent R. Bergé, 2017. "Network proximity in the geography of research collaboration," Papers in Regional Science, Wiley Blackwell, vol. 96(4), pages 785-815, November.
    4. Mario Maggioni & Teodora Uberti & Mario Nosvelli, 2014. "Does intentional mean hierarchical? Knowledge flows and innovative performance of European regions," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 53(2), pages 453-485, September.
    5. Montobbio, Fabio & Sterzi, Valerio, 2013. "The Globalization of Technology in Emerging Markets: A Gravity Model on the Determinants of International Patent Collaborations," World Development, Elsevier, vol. 44(C), pages 281-299.
    6. Sidonia Proff & Thomas Brenner, 2014. "The dynamics of inter-regional collaboration: an analysis of co-patenting," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 52(1), pages 41-64, January.
    7. Friedrich Dornbusch & Sidonia von Proff & Thomas Brenner, 2013. "The organizational and regional determinants of inter-regional collaborations – Academic inventors as bridging agents," Working Papers on Innovation and Space 2013-11, Philipps University Marburg, Department of Geography.
    8. Iris Wanzenböck & Thomas Scherngell & Thomas Brenner, 2014. "Embeddedness of regions in European knowledge networks: a comparative analysis of inter-regional R&D collaborations, co-patents and co-publications," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 53(2), pages 337-368, September.
    9. Nomaler, Önder & Frenken, Koen & Heimeriks, Gaston, 2013. "Do more distant collaborations have more citation impact?," Journal of Informetrics, Elsevier, vol. 7(4), pages 966-971.
    10. Jarno Hoekman & Koen Frenken, 2013. "Proximity and Stratification in European Scientific Research Collaboration Networks: A Policy Perspective," Advances in Spatial Science, in: Thomas Scherngell (ed.), The Geography of Networks and R&D Collaborations, edition 127, chapter 0, pages 263-277, Springer.
    11. Pierre-Alexandre Balland & Ron Boschma & Koen Frenken, 2015. "Proximity and Innovation: From Statics to Dynamics," Regional Studies, Taylor & Francis Journals, vol. 49(6), pages 907-920, June.
    12. Nomaler, Önder & Frenken, Koen & Heimeriks, Gaston, 2013. "Do more distant collaborations have more citation impact?," Journal of Informetrics, Elsevier, vol. 7(4), pages 966-971.
    13. Pierre-Alexandre Balland & Ron Boschma & Koen Frenken, 2020. "Proximity, Innovation and Networks: A Concise Review and Some Next Steps," Papers in Evolutionary Economic Geography (PEEG) 2019, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Mar 2020.
    14. Miguélez, Ernest & Moreno, Rosina, 2015. "Knowledge flows and the absorptive capacity of regions," Research Policy, Elsevier, vol. 44(4), pages 833-848.
    15. Ernest Miguélez & Rosina Moreno, 2013. "“Mobility, networks and innovation: The role of regions’ absorptive capacity”," IREA Working Papers 201316, University of Barcelona, Research Institute of Applied Economics, revised Oct 2013.
    16. Koen Frenken & Roderik Ponds & Frank Van Oort, 2010. "The citation impact of research collaboration in science‐based industries: A spatial‐institutional analysis," Papers in Regional Science, Wiley Blackwell, vol. 89(2), pages 351-271, June.
    17. Sidonia von Proff & Thomas Brenner, 2011. "The Dynamics of Inter-Regional Collaboration – An Analysis of Co-Patenting," Working Papers on Innovation and Space 2011-06, Philipps University Marburg, Department of Geography.
    18. Marie Ferru & Alain Rallet, 2016. "Proximity dynamics and the geography of innovation: diminishing returns or renewal?," Post-Print hal-02025328, HAL.
    19. Valentina Meliciani & Daniela Cagno & Andrea Fabrizi & Marco Marini, 2022. "Knowledge networks in joint research projects, innovation and economic growth across European regions," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 68(3), pages 549-586, June.
    20. Tom Broekel & Matte Hartog, 2013. "Determinants of cross-regional R and D collaboration networks: an application of exponential random graph models," Working Papers on Innovation and Space 2013-04, Philipps University Marburg, Department of Geography.

    More about this item

    Keywords

    growth; foreign direct investment; FDI; growth effects; panel GMM;
    All these keywords.

    JEL classification:

    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • E10 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - General
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business

    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:pum:wpaper:2014-04. See general information about how to correct material in RePEc.

    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 bibliographic 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.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Robert Csicsics (email available below). General contact details of provider: https://edirc.repec.org/data/vamarde.html .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.