Foreign direct investment, country capabilities and economic growth

Olofsdotter, Karin

doi:10.1007/bf02707929

Cited by 81 publications

(47 citation statements)

References 17 publications

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“…Growth rate of FDI stock (LFDIs) affected growth rate per capita positively at 10%. According to the theories the effect of efficient foreign capital accumulation improves the growth rate of host countries [73]. It is also noticeable that FDI inflows (LFDIi) have a positive effect at 1% significance on the GDP growth rate per capita without controlling the AC factors effects in the model.…”

Section: Resultsmentioning

confidence: 97%

Is FDI Spillover Conditioned on Financial Development and Trade Liberalization: Evidence from UMCs

Nobakht¹,

Madani²

2014

JBMS

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Developing countries take Foreign Direct Investment (FDI) as leverage for economic growth and development as a result of FDI technology spillovers. However, the effect of FDI inflows on economic growth of host countries is conditional on the abilities of those countries in absorbing and accumulating external knowledge. The related literature paid particular attention to the role of the financial system and trade liberalization of recipients. Thus, this paper investigated empirically the intermediary roles of the financial system and trade liberalization as Absorptive Capacity (AC) factors on the FDI led growth nexus. This study provided data evidence from 33 UpperMiddle-income Countries (UMCs) over the period of 1990-2011 to contribute to the existing literature. This empirical study employed the dynamic panel "difference" GMM estimator proposed by Arellano and Bond (1991); since it prevents the biases inherent to economic growth models including auto-correlation, unobserved heterogeneity, and endogeneity between explanatory variables. The results indicated the development of the domestic financial system facilitated FDI technology spillovers in order to enhance the economic growth of UMCs. However, the empirical findings also showed a negative effect of trade openness on stimulating the FDI spillovers.

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Section: Resultsmentioning

confidence: 97%

Is FDI Spillover Conditioned on Financial Development and Trade Liberalization: Evidence from UMCs

Nobakht¹,

Madani²

2014

JBMS

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“…Olofsdotter, 1998;Bengoa and SanchezRobles, 2003;Durham, 2004;Wang, et al, 2004: Li andLiu, 2005;Marcin, 2008), relatively few studies examine whether there exists a minimum threshold of technological or absorptive capabilities for local firms to benefit from FDI. Among several exceptions Girma (2005) applies threshold regression techniques to firm-level data from UK manufacturing industry, assessing where the impact of FDI depends on some critical value of absorptive capacity which is defined as the distance of the firm from the productivity frontier in its industry.…”

Section: Introductionmentioning

confidence: 99%

Regional Innovation and Spillover Effects of Foreign Direct Investment in China: A Threshold Approach

Huang

Liu

2012

Regional Studies

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Abstract:Using a data set on 29 Chinese provinces for the period , this paper establishes a threshold model to analyse the relationship between spillover effects of foreign direct investment (FDI) and regional innovation in China. There is clear evidence of doublethreshold effects of regional innovation on productivity spillovers from FDI. Specifically, only when the level of regional innovation reaches the minimum innovation threshold will FDI in the region begin to produce positive productivity spillovers. Furthermore, positive productivity spillovers from FDI will be substantial only when the level of regional innovation attains a higher threshold. The double threshold divides Chinese provinces into three super-regions in terms of innovation, with most provinces positioned within the middle-level innovation super-region. Policy implications are discussed.

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“…Other contribution from FDI includes playing an important role as one of the major external sources of financing (Arif, 2007), foster technological progress in the host country (Neuhaus, 2006) and develop human capital resources by getting their employees to receive training (EconomyWatch, n.d. (a)). Other empirical results that support positive relationship between FDI and economic growth include Balasubramanyam et al (1996), Olofsdotter (1998), Borensztein et.al (1998 and Bengoa and Sanchez-Robles (2003). Zhang (2001) found that growth is enhanced by FDI.…”

Section: Review On Fdi and Gdpmentioning

confidence: 90%

Malaysia’s International Relations and Foreign Direct Investment (FDI): A Structural Change Analysis

Har¹,

Ling²,

Leng³

et al. 2010

ASS

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This study aims to identify the effect of international relations and the presence of structural change using Analysis of Covariance (ANCOVA) and Chow test respectively. It also aims to examine the long run relationships among Malaysia's GDP and inward FDI, as well as among Malaysia's total FDI and inward FDI taking into consideration of international relations using Engle-Granger test. Furthermore, Error Correction Mechanism (ECM) is used to examine whether the variables are converge in the lng run. This study supports that international relation affects inwards FDI from all selected countries (Japan, United States, Singapore and Germany). In addition, inwards FDI from respective countries have long run relationship with Malaysia's GDP and Malaysia's total FDI. It also found that the respective variables are converging in the long run. With this finding in mind, international relations-focused policies can be created in order to boost up Malaysia's FDI inwards and growth.

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Foreign direct investment, country capabilities and economic growth

Cited by 81 publications

References 17 publications

Is FDI Spillover Conditioned on Financial Development and Trade Liberalization: Evidence from UMCs

Is FDI Spillover Conditioned on Financial Development and Trade Liberalization: Evidence from UMCs

Regional Innovation and Spillover Effects of Foreign Direct Investment in China: A Threshold Approach

Malaysia’s International Relations and Foreign Direct Investment (FDI): A Structural Change Analysis

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