How Does Foreign Direct Investment Affect Economic Growth?

Borensztein, Eduardo; Gregorio, José De; Lee, Jong-Wha

doi:10.3386/w5057

Cited by 747 publications

(754 citation statements)

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“…These studies can be divided into those that argue for positive [10,[24][25][26][27] and negative [28][29][30][31][32][33] effects. In particular, studies that claim negative effects explain that FDI induces a crowd-out effect, because it hinders the development of local economies [29].…”

Section: Literature Reviewmentioning

confidence: 99%

“…Furthermore, some studies do consider FDI and human capital together. For example, Borensztein et al [10] analyzed the effects of FDI and interaction (FDI*Schooling) variables on economic growth through a regression model. They proved that the interaction variables had significant positive results.…”

Section: Literature Reviewmentioning

confidence: 99%

“…It is categorized as a crucial factor that affects national development along with growth promotion factors like FDI and R&D. Furthermore, human capital can play a key role in maintaining a nation's sustainable development in combination with other growth drivers. The interaction between FDI and human capital therefore entails not only pure capital inflow but also the human capital quality of the host country to which advanced knowledge and technology are introduced for acceptance [10]. In the context of R&D, human capital leads to creative and…”

Section: Introductionmentioning

confidence: 99%

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The Nexus of FDI, R&D, and Human Capital on Chinese Sustainable Development: Evidence from a Two-Step Approach

Park

2018

Sustainability

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This study examines the effect of the foreign direct investment (FDI)-human capital and R&D-human capital interactions (FDIHC and RDHHC) on Chinese development between 1991 and 2015. Based on endogenous growth theory, the study focuses on FDI, R&D, and human capital as important factors for sustained economic growth; the interactions among factors are set as the main variables affecting economic growth (GDP). In particular, this study attempts a two-step empirical analysis. First, data mining and semantic network analysis (SNA) are performed using variables as keywords; reliability and realism are reflected as variables. Second, using the vector error correction model (VECM), the study analyzes short and long run mutual influences between variables. The results show that, in data mining and SNA with FDI and R&D as keywords, words related to human capital show high frequency, centrality, and clustering. This finding implies that FDIHC and RDHHC have robustness as variables and can be used as interaction variables. According to the VECM results, FDIHC and RDHHC have positive influences on GDP in the short and long run. The results of a variance decomposition test show that RDHHC has strong mid-to long-run impacts on GDP, FDIHC, and R&D itself.

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Section: Literature Reviewmentioning

confidence: 99%

Section: Literature Reviewmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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The Nexus of FDI, R&D, and Human Capital on Chinese Sustainable Development: Evidence from a Two-Step Approach

Park

2018

Sustainability

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“…Like we did before with respect to the hypothesised interactive relationship between human capital and FDI (Borensztein, De Gregorio and Lee, 1998), we calculate the first-order condition of the growth equation with respect to /)', and set this equation equal to zero. This allows us to determine the threshold value of /&5('3 above which /)', starts to have a positive effect on growth.…”

Section: <Insert Table 5>mentioning

confidence: 99%

Foreign direct investment, financial development and economic growth

Hermes

Lensink

2003

Journal of Development Studies

830

547

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This article argues that the development of the financial system of the recipient country is an important precondition for FDI to have a positive impact on economic growth. A more developed financial system positively contributes to the process of technological diffusion associated with FDI. The article empirically investigates the role the development of the financial system plays in enhancing the positive relationship between FDI and economic growth. The empirical investigation presented in the article strongly suggests that this is the case. Of the 67 countries in data set, 37 have a sufficiently developed financial system in order to let FDI contribute positively to economic growth. Most of these countries are in Latin America and Asia.

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“…This subject has been studied extensively at both the theoretical and empirical levels (Aitken and Harrison 1989;Bengoa and Sanchez-Robles 2003;Blomstrom et al 1992;Blonigen 2005;Borensztein et al 1995;Chowdhury and Mavrotas 2006;Ciruelos and Wang 2005;Damijan et al 2003;Frimpong and Oteng-Abayie 2006;Lipsey 2000Lipsey , 2002Kohpaiboon 2002). …”

Section: Introductionmentioning

confidence: 99%

Openness and the Efficiency of FDI: A Panel Stochastic Production Frontier Study

Nourzad

2007

Int Adv Econ Res

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How Does Foreign Direct Investment Affect Economic Growth?

Cited by 747 publications

References 0 publications

The Nexus of FDI, R&D, and Human Capital on Chinese Sustainable Development: Evidence from a Two-Step Approach

The Nexus of FDI, R&D, and Human Capital on Chinese Sustainable Development: Evidence from a Two-Step Approach

Foreign direct investment, financial development and economic growth

Openness and the Efficiency of FDI: A Panel Stochastic Production Frontier Study

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