IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this paper or follow this series

Determinants and growth effects of foreign direct investment

  • Uppenberg, Kristian

    ()

    (European Investment Bank, Economic and Financial Studies)

  • Riess, Armin

    ()

    (European Investment Bank, Economic and Financial Studies)

Focussing on Europe, this paper starts with reviewing the main determinants of foreign direct investment (FDI); a key observation is that economic policies and non-policy factors contribute equally to the direction of FDI flows. The paper then examines the growth-FDI nexus: while a strong positive correlation between inward FDI and economic growth exists, at least in the more advanced EU-15 economies it is not clear whether the causality runs from FDI to growth or vice versa; in the countries of Central and Eastern Europe (CEE) there is stronger evidence that FDI has boosted growth during the transition period, partly by augmenting domestic investment; that said, evidence of technology spillovers (a potentially important channel for FDI to boost growth) is harder to find in CEE than in developed economies. The paper finally argues that growth-enhancing policies in general are more promising than specific support for FDI.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://www.eib.org/attachments/efs/eibpapers/eibpapers_2004_v09_n01_en.pdf#page=50
File Function: Full text
Download Restriction: no

Paper provided by European Investment Bank, Economics Department in its series EIB Papers with number 3/2004.

as
in new window

Length: 33 pages
Date of creation: 18 Jun 2004
Date of revision:
Handle: RePEc:ris:eibpap:2004_003
Contact details of provider: Postal: 100, boulevard Konrad Adenauer, L-2950 Luxembourg
Phone: (+352) 43 79 1
Fax: (+352) 43 79 68 895
Web page: http://www.eib.org/efs/
Email:


More information through EDIRC

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

as in new window
  1. Giuseppe Nicoletti & Steve Golub & Dana Hajkova & Daniel Mirza & Kwang-Yeol Yoo, 2003. "Policies and International Integration: Influences on Trade and Foreign Direct Investment," OECD Economics Department Working Papers 359, OECD Publishing.
  2. Coase, R H, 1988. "The Nature of the Firm: Meaning," Journal of Law, Economics and Organization, Oxford University Press, vol. 4(1), pages 19-32, Spring.
  3. Blomstrom, Magnus & Wolff, E.N., 1989. "Multinational Corporations And Productivity Convergence In Mexico," Working Papers 89-28, C.V. Starr Center for Applied Economics, New York University.
  4. Görg, Holger & Strobl, Eric, 2002. "Multinational Companies and Indigenous Development: An Empirical Analysis," CEPR Discussion Papers 3325, C.E.P.R. Discussion Papers.
  5. Tondl, Gabriele & Vuksic, Goran, 2003. "What makes regions in Eastern Europe catching up? The role of foreign investment, human resources and geography," ZEI Working Papers B 12-2003, ZEI - Center for European Integration Studies, University of Bonn.
  6. Mark E. Doms & J . Bradford Jensen, 1998. "Comparing Wages, Skills, and Productivity between Domestically and Foreign-Owned Manufacturing Establishments in the United States," NBER Chapters, in: Geography and Ownership as Bases for Economic Accounting, pages 235-258 National Bureau of Economic Research, Inc.
  7. Djankov, Simeon & Hoekman, Bernard, 1999. "Foreign investment and productivity growth in Czech enterprises," Policy Research Working Paper Series 2115, The World Bank.
  8. Yuko Kinoshita & Nauro F. Campos, 2003. "Why Does Fdi Go Where It Goes? New Evidence From The Transition Economies," William Davidson Institute Working Papers Series 2003-573, William Davidson Institute at the University of Michigan.
  9. Mark Bils & Peter J. Klenow, 1998. "Does Schooling Cause Growth or the Other Way Around?," NBER Working Papers 6393, National Bureau of Economic Research, Inc.
  10. Agrawal, Anup & Jaffe, Jeffrey F & Mandelker, Gershon N, 1992. " The Post-merger Performance of Acquiring Firms: A Re-examination of an Anomaly," Journal of Finance, American Finance Association, vol. 47(4), pages 1605-21, September.
  11. Jonathan Temple, 1999. "The New Growth Evidence," Journal of Economic Literature, American Economic Association, vol. 37(1), pages 112-156, March.
  12. N. De Liso & G. Filatrella, 1999. "On technology competition," Working Papers 337, Dipartimento Scienze Economiche, Universita' di Bologna.
  13. Evzen Kocenda & Jan Svejnar, 2003. "Ownership and Firm Performance after Large-Scale Privatization," CERGE-EI Working Papers wp209, The Center for Economic Research and Graduate Education - Economics Institute, Prague.
  14. Jozef Konings, 2000. "The Effects of Foreign Direct Investment on Domestic Firms: Evidence from Firm Level Panel Data in Emerging Economies," William Davidson Institute Working Papers Series 344, William Davidson Institute at the University of Michigan.
  15. Jonathan E. Haskel & Sonia C. Pereira & Matthew J. Slaughter, 2002. "Does Inward Foreign Direct Investment Boost the Productivity of Domestic Firms?," Working Papers 452, Queen Mary University of London, School of Economics and Finance.
  16. 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.
  17. Davies, Stephen W & Lyons, Bruce R, 1991. "Characterising Relative Performance: The Productivity Advantage of Foreign Owned Firms in the UK," Oxford Economic Papers, Oxford University Press, vol. 43(4), pages 584-95, October.
  18. Sourafel Girma & David Greenaway & Katharine Wakelin, 2013. "Who Benefits from Foreign Direct Investment in the UK?," Scottish Journal of Political Economy, Scottish Economic Society, vol. 60(5), pages 560-574, November.
  19. Rachel Griffith & Stephen Redding & Helen Simpson, 2003. "Productivity Convergence and Foreign Ownership at the Establishment Level," CEP Discussion Papers dp0573, Centre for Economic Performance, LSE.
  20. Benfratello, Luigi & Sembenelli, Alessandro, 2006. "Foreign ownership and productivity: Is the direction of causality so obvious?," International Journal of Industrial Organization, Elsevier, vol. 24(4), pages 733-751, July.
  21. Barrell, Ray & Pain, Nigel, 1999. "Domestic institutions, agglomerations and foreign direct investment in Europe," European Economic Review, Elsevier, vol. 43(4-6), pages 925-934, April.
  22. Richard Harris & Catherine Robinson, 2003. "Foreign Ownership and Productivity in the United Kingdom Estimates for U.K. Manufacturing Using the ARD," Review of Industrial Organization, Springer, vol. 22(3), pages 207-223, May.
  23. Girma, Sourafel & Wakelin, Katharine, 2001. "Regional Underdevelopment: Is FDI the Solution? A Semiparametric Analysis," CEPR Discussion Papers 2995, C.E.P.R. Discussion Papers.
  24. Barrell, Ray & Pain, Nigel, 1997. "Foreign Direct Investment, Technological Change, and Economic Growth within Europe," Economic Journal, Royal Economic Society, vol. 107(445), pages 1770-86, November.
  25. Damijan, Joze P. & Knell, Mark & Majcen, Boris & Rojec, Matija, 2003. "The role of FDI, R&D accumulation and trade in transferring technology to transition countries: evidence from firm panel data for eight transition countries," Economic Systems, Elsevier, vol. 27(2), pages 189-204, June.
  26. Sanghoon Ahn, 2002. "Competition, Innovation and Productivity Growth: A Review of Theory and Evidence," OECD Economics Department Working Papers 317, OECD Publishing.
  27. Selin Sayek & Laura Alfaro & Areendam Chanda & Sebnem Kalemli-Ozcan, 2003. "FDI Spillovers, Financial Markets and Economic Development," IMF Working Papers 03/186, International Monetary Fund.
  28. Vinish Kathuria, 2001. "Foreign firms, technology transfer and knowledge spillovers to Indian manufacturing firms: a stochastic frontier analysis," Applied Economics, Taylor & Francis Journals, vol. 33(5), pages 625-642.
  29. George N. Yannopoulos, 1990. "Foreign Direct Investment and European Integration: The Evidence from the Formative Years of the European Community," Journal of Common Market Studies, Wiley Blackwell, vol. 28(3), pages 235-259, 03.
  30. Vinish Kathuria, 2000. "Productivity spillovers from technology transfer to Indian manufacturing firms," Journal of International Development, John Wiley & Sons, Ltd., vol. 12(3), pages 343-369.
  31. Orazio P. Attanasio & Lucio Picci & Antonello E. Scorcu, 2000. "Saving, Growth, and Investment: A Macroeconomic Analysis Using a Panel of Countries," The Review of Economics and Statistics, MIT Press, vol. 82(2), pages 182-211, May.
  32. James R. Markusen & Anthony J. Venables, 1997. "Foreign Direct Investment as a Catalyst for Industrial Development," NBER Working Papers 6241, National Bureau of Economic Research, Inc.
  33. Steven Globerman & John C. Ries & Ilan Vertinsky, 1994. "The Economic Performance of Foreign Affiliates in Canada," Canadian Journal of Economics, Canadian Economics Association, vol. 27(1), pages 143-56, February.
  34. Julian Simon & Manouchehr Mokhtari & Daniel Simon, 1996. "Are Mergers Beneficial or Detrimental? Evidence from Advertising Agencies1," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 3(1), pages 69-82.
  35. Ann E. Harrison & Brian J. Aitken, 1999. "Do Domestic Firms Benefit from Direct Foreign Investment? Evidence from Venezuela," American Economic Review, American Economic Association, vol. 89(3), pages 605-618, June.
  36. Jingjing Yang & Helian Xu & Chengang Wang & Mingyong Lai & Yingqi Wei, 2009. "Productivity spillovers from foreign direct investment in Chinese industries," Journal of Chinese Economic and Business Studies, Taylor & Francis Journals, vol. 7(4), pages 429-446.
  37. Haddad, Mona & Harrison, Ann, 1993. "Are there positive spillovers from direct foreign investment? : Evidence from panel data for Morocco," Journal of Development Economics, Elsevier, vol. 42(1), pages 51-74, October.
  38. Dimelis, Sophia & Louri-Dendrinou, Eleni, 2001. "Foreign Direct Investment and Efficiency Benefits: A Conditional Quantile Analysis," CEPR Discussion Papers 2868, C.E.P.R. Discussion Papers.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:ris:eibpap:2004_003. 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: (Polyxeni Kanelliadou)

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 references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link 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 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.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.