FDI, natural resource and economic growth: A Threshold model approach

Hayat, Arshad and Muhammad, Tahir (2017): FDI, natural resource and economic growth: A Threshold model approach.

Abstract

In this article, we present analyses of the link between natural resources, FDI, and economic growth. We use the Fixed Effect Threshold Model for panel data with annual frequency for 83 countries. Our results show that FDI has a strong positive impact on the economic growth of the host country if the host country’s natural resources export is below the statistically significant estimated threshold. However, this FDI-induced economic growth is watered-down if the countries natural resources export is larger than the estimated threshold. The results are robust for alternative indicators of natural resources, i.e., natural resources rents.

• Item Type: MPRA Paper
• Language: English
• Keywords: FDI, Economic Growth, Natural Resources, Threshold Model
• Subjects: O - Economic Development, Innovation, Technological Change, and Growth > O4 - Economic Growth and Aggregate Productivity > O47 - Empirical Studies of Economic Growth ; Aggregate Productivity ; Cross-Country Output Convergence; P - Economic Systems > P2 - Socialist Systems and Transitional Economies > P28 - Natural Resources ; Energy ; Environment; P - Economic Systems > P4 - Other Economic Systems > P45 - International Trade, Finance, Investment, and Aid

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