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How does foreign direct investment affect economic growth

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TLDR
In this article, the effect of FDI on economic growth in a cross-country regression framework was investigated. And they found that FDI contributes to economic growth only when a sufficient absorptive capability of the advanced technologies is available in the host economy.
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This article is published in Journal of International Economics.The article was published on 1998-06-01 and is currently open access. It has received 4268 citations till now. The article focuses on the topics: Foreign direct investment & Productivity.

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Taxing capital flows: an empirical comparative analysis

TL;DR: In this paper, the authors analyzed the link between income growth and private capital inflows and found that bank flows stand as the sole source of foreign financing that displays a positive and robust correlation with growth.
Journal ArticleDOI

An empirical investigation of foreign direct investment and economic growth in SAARC nations

TL;DR: In this article, the causal nexus between foreign direct investment (FDI) and economic growth in SAARC countries was investigated, where Johansen's cointegration test was employed to examine the long-run relationship between FDI and economic development.
Journal ArticleDOI

The Role of FDI Inflows in Economic Growth in Malaysia (Time Series: 1975-2010)

TL;DR: In this paper, the authors identify the role of FDI inflows in Malaysia economic growth through a proposed endogenous growth model, which covers from 1975 to 2010, and use Hierarchical Multiple Regression (HMR) analysis to find out the momentum of the Malaysia economy including FDI inflow.
Posted Content

Productivity and economic growth: an empirical assessment of the contribution of fdi to the chinese economy

TL;DR: This article found a bidirectional causal linkage between FDI and productivity growth across the regions in China, suggesting that changes in FDI intensity Granger-cause changes in productivity, and vice versa.
Journal ArticleDOI

Determinants of foreign direct investment in Thailand: Does natural disaster matter?

TL;DR: In this article, the effect of natural disasters on foreign direct investment (FDI) was explored by applying the simultaneous equation approach to account for endogeneity between variables, and the results showed that natural disaster does matter for FDI flows.
References
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ReportDOI

Endogenous Technological Change

TL;DR: In this paper, the authors show that the stock of human capital determines the rate of growth, that too little human capital is devoted to research in equilibrium, that integration into world markets will increase growth rates, and that having a large population is not sufficient to generate growth.
Journal ArticleDOI

Finance and Growth: Schumpeter Might Be Right

TL;DR: In this paper, the authors examined a cross-section of about 80 countries for the period 1960-89 and found that various measures of financial development are strongly associated with both current and later rates of economic growth.
Book

Innovation and growth in the global economy

TL;DR: Grossman and Helpman as discussed by the authors developed a unique approach in which innovation is viewed as a deliberate outgrowth of investments in industrial research by forward-looking, profit-seeking agents.
Posted Content

A sensitivity analysis of cross-country growth regressions

TL;DR: The authors examined whether the conclusions from existing studies are robust or fragile to small changes in the conditioning information set and found a positive, robust correlation between growth and the share of investment in GDP and between investment share and the ratio of international trade to GDP.
Journal ArticleDOI

Institutions and economic performance: cross‐country tests using alternative institutional measures

TL;DR: The authors compared more direct measures of the institutional environment with both the instability proxies used by Barro (1991) and the Gastil indices, by comparing their effects both on growth and private investment.
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Trending Questions (2)
How does foreign direct investment affect economic growth?

FDI is an important vehicle for technology transfer and contributes more to economic growth than domestic investment, but only when the host country has a minimum threshold stock of human capital.

How does foreign direct investment affect economic growth?

Foreign direct investment (FDI) contributes to economic growth by transferring technology, but only when the host country has a minimum stock of human capital.