This paper presents, within a new growth theory framework, an analysis of the role of Foreign Direct Investment (FDI) in promoting economic growth. Evidence reported suggests that an important role is exerted by both the size of the domestic market and the competitive climate in relation to local producers. In addition, evidence is reported to indicate that interactions between FDI and human capital exert an especially important influence upon growth performance.Foreign Direct Investment, economic growth, human capital real wages,
Economic liberalization has been a pervasive phenomenon over the last twenty years. Programs have been initiated on the assumption that liberalization promotes economic growth, but the empirical evidence for this is limited. This paper takesa novel approach to modeling growth and structural change as smooth transitions. This allows us to model deterministic change without imposing discrete changes. We use smooth transition analysis to reappraise the time-series properties of longrun growth rates in a number of developing countries which have undertaken liberalization. Our results challenge conventional wisdom on both methodological and empirical grounds. (JEL F1, C2, 04)
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