Munich Personal RePEc Archive

What is the evidence on the role of foreign direct investment in economics growth, and on the determinants of foreign direct investment flows?

Douglas, Niall Edward (2006): What is the evidence on the role of foreign direct investment in economics growth, and on the determinants of foreign direct investment flows?

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Abstract

Firstly I shall investigate the determinants of FDI flows and why they have supplanted other forms of foreign investment in recent years. I shall then turn to their effects on GDP growth, examining the empirical evidence in the modern form and also that of during the British empire, where its FDI was far longer lasting and substantial (relative to world GDP) than at present. I shall then suggest a simple model to explain this behaviour, and finally extract a conclusion that FDI improves GDP growth in the short term, but has a negative effect in the long term.

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