publication . Report . Preprint . Article . Other literature type . 1998

How Does Foreign Direct Investment Affect Economic Growth?

Borensztein, E.; De Gregorio, J.; Lee, J-W.;
Open Access
  • Published: 01 Jun 1998
  • Publisher: National Bureau of Economic Research
Abstract
We test the effect of foreign direct investment (FDI) on economic growth in a cross-country regression framework, utilizing data on FDI flows from industrial countries to 69 developing countries over the last two decades. Our results suggest that FDI is an important vehicle for the transfer of technology, contributing relatively more to growth than domestic investment. However, the higher productivity of FDI holds only when the host country has a minimum threshold stock of human capital. In addition, FDI has the effect of increasing total investment in the economy more than one for one, which suggests the predominance of complementarity effects with domestic fir...
Subjects
free text keywords: jel:F43, jel:O19, Domestic investment, International trade, business.industry, business, International economics, Foreign portfolio investment, Developing country, Economics, Return on investment, Microeconomics, Human capital, Complementarity (molecular biology), Total investment, Foreign direct investment
Powered by OpenAIRE Open Research Graph
Any information missing or wrong?Report an Issue
publication . Report . Preprint . Article . Other literature type . 1998

How Does Foreign Direct Investment Affect Economic Growth?

Borensztein, E.; De Gregorio, J.; Lee, J-W.;