Showing papers by "Eliyathamby A. Selvanathan published in 2008"
TL;DR: This article investigated the causal link between foreign direct investment, domestic investment and economic growth in China for the period 1988-2003 using a multivariate VAR system with error correction model (ECM) and the innovation accounting (variance decomposition and impulse response function analysis) techniques.
Abstract: This paper investigates the causal link between foreign direct investment (FDI), domestic investment and economic growth in China for the period 1988–2003 using a multivariate VAR system with error correction model (ECM) and the innovation accounting (variance decomposition and impulse response function analysis) techniques. The results show that while there is a bi-directional causality between domestic investment and economic growth, there is only a single-directional causality from FDI to domestic investment and to economic growth. Rather than crowding out domestic investment, FDI is found to be complementary with domestic investment. Thus, FDI has not only assisted in overcoming shortage of capital, it has also stimulated economic growth through complementing domestic investment in China.
213 citations
01 Jan 2008
TL;DR: This article investigated the causal link between foreign direct investment (FDI), domestic investment and economic growth in China for the period 1988-2003 and found that FDI has not only assisted in overcoming shortage of capital, but also stimulated economic growth through complementing domestic investment in China.
Abstract: In this paper, we investigate the causal link between foreign direct investment (FDI), domestic investment and economic growth in China for the period 1988-2003. Towards this purpose, a multivariate VAR system with error correction model (ECM) and the innovation accounting (variance decomposition and impulse response function analysis) techniques are used. The results show that while there is a bi-directional causality between domestic investment and economic growth, there is only a single-directional causality from FDI to domestic investment and to economic growth. Rather than crowding out domestic investment, FDI is found to be complementary with domestic investment. Thus, FDI has not only assisted in overcoming shortage of capital, it has also stimulated economic growth through complementing domestic investment in China.
34 citations