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Foreign Direct Investment, Human Capital And Nonlinearities In Economic Growth

  • Thanasis Stengos


    (University of Guelph, Canada and The Rimini Centre for Economic Analysis, Italy)

  • Costantina Kottaridi

    (University of Peloponnese, Greece)

This paper examines the effect of FDI on the process of economic growth by allowing the impact to differ both across each country and also across each time period. We apply non-parametric techniques taking into account the previously documented nonlinear effects of initial income and human capital on economic growth. We use a wide range of countries, both developed and developing in order to be able to distinguish potential differential effects between the two groups. Our findings suggest that FDI inflows have a moderately nonlinear effect on growth and that the human capital nonlinear effect in the presence of FDI inflows is similar to the one found elsewhere in the relevant literature. Classification-JEL: O47

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Paper provided by The Rimini Centre for Economic Analysis in its series Working Paper Series with number 20-08.

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Date of creation: Jan 2008
Date of revision: Jan 2008
Handle: RePEc:rim:rimwps:20-08
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