This study examines the impact of institutional quality on foreign direct investment (F.D.I.) by categorising the countries as developed or developing. We measured institutional quality by the sum of control of corruption and rule of law indicators. We provide evidence that institutional quality positively and significantly impacts F.D.I. in developed countries; specifically, we find that a one standard deviation change in governance significantly affects F.D.I. by a factor of 0.2225 (using common law and the lagged values of the independent variables as instruments). Ceteris paribus, the results for the developing countries demonstrate that the institutional quality impact is insignificant because of the weak structure of institutions. Result findings strongly support the significance of governance indicators in attracting F.D.I. inflows. From our results, we infer that the relevance of governance indicators tends to be a key point in attracting F.D.I. inflows.

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This study investigates the impact of external debt and Foreign direct investment (FDI) on economic growth in Tanzania using time series data from 1971-2011. The empirical analysis was based on ARDL model and the Bounds test approach of co-integration as advocated by Pesaran et al (2001) to test for long-run equilibrium relationship. The results show that, in the long-run debt promote economic growth in Tanzania. However, foreign direct investment exhibits a negative impact on economic growth. While in the short-run, the results indicate that there is no directional causality either between external debts (PD) and economic growth (RGDP) or between FDI_INFL and economic growth (RGDP).

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This paper examines the drivers behind China's economic growth. In particular, it focuses on the channels of knowledge spillovers: human capital and openness to trade and foreign direct investment. The specific features of the study include using the most recent comprehensive panel data consisting of 29 provinces during the period 1994-2006 and performing unit root and cointegration tests in the panel data framework. The paper finds that human capital, trade and FDI are the significant determinants of total factor productivity, but their importance varies with technological levels of provinces. These findings have important policy implications.openness, human capital, economic growth, panel data,