FOREIGN DIRECT INVESTMENT AND ECONOMIC GROWTH: SOME EVIDENCE FROM ACROSS THE WORLD

Halicioglu, Anita and Halicioglu, Ferda (2006): FOREIGN DIRECT INVESTMENT AND ECONOMIC GROWTH: SOME EVIDENCE FROM ACROSS THE WORLD.

Abstract

This study is concerned about foreign direct investment (FDI) and economic growth across the world for the period of 1991-2001. This article produces fresh empirical evidence on the relation between FDI and economic growth obtained from single-equation and simultaneous equation estimates for 140 countries using macro economic variables. The results indicate that a positive and statistically significant estimate of coefficient of FDI is obtained from single equation ordinary least squares method for real per-capita GDP regressions in all but one case. There exists a positive and statistically significant relation between the real per-capita GDP and FDI in the case of many countries but correlation coefficient between exports-GDP ratio and percentage FDI is found to be insignificant. Country risk rating and the telecommunications variables are significant in all the relevant regressions and correlation estimates.

• Item Type: MPRA Paper
• Language: English
• Keywords: Foreign direct investment; multinational corporations; composite risk rating; instrumental variable method; omitted variable method; simultaneous equation method
• Subjects: O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development > O11 - Macroeconomic Analyses of Economic Development; F - International Economics > F1 - Trade > F15 - Economic Integration

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