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The interaction between FDI, output and the spillover variables: co-integration and VAR analyses for APEC, 1965-1999

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  • A. Bende-Nabende
  • J. L. Ford
  • B. Santoso
  • S. Sen

Abstract

In this empirical study, it is considered whether FDI has directly induced long-run effects on output in a selection of East Asian countries or whether such an influence, if any, has been transmitted indirectly through spillover effects. The Johansen cointegration methodology and resultant VECs are employed, and the use of that methodology within a panel framework tested. Equal evidence of negative and positive direct significant long-run relationship between FDI and output in the countries is found in the sample. In addition, indirect spillovers effects are found, which are positive for some country variables and negative for others. There is also an indication that the statistically significant positive spillovers occur in the economically less developed countries.

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  • A. Bende-Nabende & J. L. Ford & B. Santoso & S. Sen, 2003. "The interaction between FDI, output and the spillover variables: co-integration and VAR analyses for APEC, 1965-1999," Applied Economics Letters, Taylor & Francis Journals, vol. 10(3), pages 165-172.
    • Handle: RePEc:taf:apeclt:v:10:y:2003:i:3:p:165-172
    DOI: 10.1080/1350485022000044057
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    1. 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.
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    3. V N Balasubramanyam & M Salisu & David Sapsford, "undated". "Foreign Direct Investment and Growth: New Hypotheses and Evidence," Working Papers ec7/96, Department of Economics, University of Lancaster.
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