Marasco, Antonio (2002): High tech foreign direct investment and its impact on economic development.
Download (114kB) | Preview
Recent empirical studies concerning the impact of foreign direct investment (FDI) on economic development have all been taking into account FDI as a whole. However, the theoretical literature on the topic argues that more attention should be devoted to distinguishing FDI by type, and suggests that FDI with high technological content might play a peculiar role. This paper investigates the existence and the magnitude of this peculiar effect. With reference to developing countries, we find strong evidence that countries with a larger population and a larger stock of human capital, and countries that enjoy lesser uncertainty, are able to attract more FDI with a higher technological content. We also find evidence pointing towards a positive relationship between the share of technology embodied into FDI and the level of economic development in the host country.
|Item Type:||MPRA Paper|
|Institution:||Lahore University of Management Sciences|
|Original Title:||High tech foreign direct investment and its impact on economic development|
|Keywords:||Cross-section regression; Foreign direct investment; High tech; Manufacturing; Human capital; Development|
|Subjects:||O - Economic Development, Technological Change, and Growth > O3 - Technological Change; Research and Development; Intellectual Property Rights > O33 - Technological Change: Choices and Consequences; Diffusion Processes
O - Economic Development, Technological Change, and Growth > O1 - Economic Development > O14 - Industrialization; Manufacturing and Service Industries; Choice of Technology
F - International Economics > F2 - International Factor Movements and International Business > F21 - International Investment; Long-Term Capital Movements
C - Mathematical and Quantitative Methods > C3 - Multiple or Simultaneous Equation Models; Multiple Variables > C31 - Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models
O - Economic Development, Technological Change, and Growth > O5 - Economywide Country Studies > O57 - Comparative Studies of Countries
|Depositing User:||Antonio Marasco|
|Date Deposited:||20. Oct 2007|
|Last Modified:||13. Feb 2013 10:44|
Alfaro, L., Chanda, A., Kalemli-Ozcan, S. and Sayek, S. (2004). 'FDI and economic growth: the role of local financial markets', Journal of International Economics, 64 (1), pp. 89-112.
Arellano, M. and Bond, S. (1991). 'Some tests of specification for panel data: Monte Carlo evidence and an application to employment equations', Review of Economic Studies, 58(2), pp. 277-297.
Barba-Navarretti, G. and Venables, A. J., with Barry, F. G., Ekholm, K., Falzoni, A. M., Haaland, J. I., Midelfart, K. H., and Turrini, A. (2004). Multinational Firms in the World Economy, Princeton University Press.
Barro, R. and Lee, J-W. (1997). 'Schooling Quality in a Cross Section of Countries', Working Paper No. 6198, NBER, www.nber.org.
Barro, R. and Sala-i-Martin, X. (1995). Economic Growth, Cambridge, MA: Mc Graw-Hill Press.
Blundell, R. and Bond, S. (1997). 'Initial conditions and moment restrictions in dynamic panel data models', Discussion Paper 97-07, Department of Economics, University College London.
Borensztein E., De Gregorio J. and Lee J.W. (1998). 'How does foreign direct investment affect economic growth?'.Journal of International Economics, 45, pp. 115-135.
Carkovic, M. and Levine, R. (2002), 'Does foreign direct investment accelerate economic growth?', mimeo, Department of Finance, University of Minnesota, www.worldbank.org/research/conferences/financial_globalization/fdi.pdf.
De Mello, L.R. Jr. (1999). 'Foreign direct investment-led growth: evidence from time series and panel data', Oxford Economic Papers, 51, pp. 133-151.
Glass, A.J. and Saggi, K. (1998). 'International technology transfer and the technology gap' Journal of Development Economics, 55, pp. 369-398.
Grossman, G.M. and Helpman, E. (1991). Innovation and Growth in the Global Economy, Cambridge, MA: MIT Press.
Nair-Reichert, U. and Weinhold, D. (2001). 'Causality tests for cross-country panels: a new look at FDI and economic growth in developing countries', Oxford Bulletin of Economics and Statistics, 63(2), pp. 153-171.
Nehru V, Swanson, E. and Dubey, A. (1995). ‘A new database on human capital stock in developing and industrial countries: sources, methodology and results’, Journal of Development Economics, 46, pp. 379-401.
Pottelsberghe de la Potterie, van, B. and Lichtenberg, F. (2001). 'Does foreign direct investment transfer technology across borders?', The Review of Economics and Statistics, 83(3), pp. 490-497.
Romer, P. (1990). 'Endogenous technological change', Journal of Political Economy, 98, pp. S71 - S102.