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This paper investigates the impact of foreign direct investment on domestic investment and the role of local conditions. Local conditions determine the extent to which host countries can absorb and hence benefit from FDI. We assess conditions under which FDI is likely to be beneficial or inimical to development in Africa. We apply the fixed effects and the two-step system GMM estimation techniques for 48 African economies from 1980 to 2016. We use gross fixed capital formation (GFCF) as a percentage of GDP as a proxy for domestic investment (DI) as our dependent variable. We use the following control variables: growth rate in real GDP (RGDP); savings as a percentage of GDP; and inflation. We also control for openness, financial sector development and institutional quality. We use annual data from the World Bank's World Development Indicators (WDI), the International Monetary Fund's (IMF) International Financial Statistics, the UNCTAD database and the Freedom House database. We find that there is a negative relationship between FDI and domestic investment, suggesting that FDI has a crowding-out effect. The negative association may also imply that countries with lower domestic investment attract more FDI because there are more domestically unsatisfied opportunities for foreign investors. However, the negative relationship between FDI and domestic investment does not necessarily imply that FDI has no benefits. It could as well be that the positive benefits from FDI in Africa may be as a result of an increase in total factor productivity (TFP) which more than compensates for the decline in domestic investment. The study also finds that improved institutions and trade openness mitigate the negative effect of FDI on domestic investment while financial market development exacerbates the negative effect. Policy efforts aimed at attracting FDI should be balanced with the imperative of strengthening institutions and domestic firms. A number of scholars have shown that that even in those countries where FDI has been more productive, domestic investment is more effective than FDI in promoting growth. Investment incentives should therefore not discriminate against domestic investors. Market regulations to dismantle the monopolistic tendencies of some foreign investors must be strengthened. [ABSTRACT FROM AUTHOR]

Purpose The purpose of this paper is to investigate the potential determinants of FDI, in developed and developing countries.Design/methodology/approach This paper investigates FDI determinants based on panel data analysis using static and dynamic modeling for 20 countries (11 developed and 9 developing), over the period 2004-2013. For static model estimations, Hausman (1978) test indicates the applicability of fixed effect/random effect, while generalized moments of methods (GMM) (dynamic model) is used to capture endogeneity and unobserved heterogeneity.Findings The outcome across different countries depicts diverse results. In developed countries, FDI seeks policy-related determinants (GDP growth, trade openness, and freedom index), and in developing country FDI showed positive association for economic determinants (gross fixed capital formulation (GFCF), trade openness, and efficiency variables).Research limitations/implications The destination of FDI is limited to 20 countries in the present paper. The indicator of the institutional environment, namely economic freedom index, used in this paper has received some criticism in calculations.Practical implications The paper enlists recommendations for future FDI policies and may assist government in providing a tactical framework for skill development, thereby increasing manufacturing growth rate. The paper also throws light on vertical and horizontal capital inflows considering resource, strategy, and market-seeking FDI.Social implications FDI may bring significant benefits by creating high-quality jobs, introducing modern production and management practices. It highlights how multinational corporations and government contribute to better working conditions in host countries.Originality/value The paper uncovers important features like macroeconomic variables, especially country-wise efficiency scores, policy variables, GFCF, and freedom index, for determining FDI inflows in 20 countries using panel data methods and provides a roadmap for developed and developing countries. The study highlights endogeneity and unobserved heteroscedasticity by applying GMM one- and two-step procedure. [ABSTRACT FROM AUTHOR]

In this paper, we have explored the relationship between three key indicators of the health of any economy, namely, human development index (HDI), foreign direct investment (FDI) and gross domestic product (GDP). Three alternative models were assessed in the study to investigate the dynamics of the cause and effect relationship between the three variables. Thirty countries were selected for the purpose of the study on the basis of a positive change in their HDI ranks from 2012 to 2017. Further, the countries were categorized into countries with very high, high, medium and low HDI ranks. Annual FDI, HDI and GDP data for the period from 1990 through 2016 were used to investigate the nature of the relationship among the selected variables. The proposed models testing the outcome-explanatory variable relationship between FDI, HDI, and GDP were tested using cointegrating regression with panel dynamic least square model (DOLS) and panel fully modified least square model (FMOLS). The findings of the study show that HDI and FDI are the statistically significant variables that positively impact the changes in GDP. Further, the impact of HDI is of larger magnitude than FDI. However, GDP and FDI were not found to exert any statistically significant impact on HDI for the period under the study. Similarly, HDI and GDP were also not found to exert any significant impact on FDI. Before applying DOLS and FMOLS, stationarity was confirmed using five panel unit root tests, namely, LLC, IPS, Fisher-type tests using ADF and PP and Hadri. Thereafter, Pedroni residual cointegration test and Kao residual cointegration test were used to confirm the existence of cointegration among the variables, which is a necessary condition for applying DOLS and FMOLS. The study has key implications for the policymakers in search of models and plans to boost GDPs of their respective countries. Since HDI exerts more than proportionate positive impact on GDP, governments can focus on improving the three components of HDI, namely, life expectancy, adult literacy and education enrolment to promote economic growth. Further, since FDI exerts a positive impact on GDP, policymakers can strategize to make more friendly policies to attract foreign investors. [ABSTRACT FROM AUTHOR]

This paper examines the dynamic association between foreign direct investment (FDI), public investment of local governments (IPUB) and economic growth for the 32 states in Mexico grouped by region and level of competitiveness for the 2006-2015 period. In particular, we examine the crowding-in and crowdingout effects of the two types of investments, as well as their impact on economic growth. We employ a panel data vector autorregression (VARP) model from which we obtain evidence indicating that IPUB shocks have a negative impact on the response of IED and also that IPUB responds positively, but weakly to FDI. We also find a negative and significant response of regional GDP growth to IPUB shocks, particularly in the north of Mexico. Finally, we find that shocks to FDI do not encourage GDP growth and that states in the south even experience negative rates of growth of per capita GDP. [ABSTRACT FROM AUTHOR]

This paper analyzes the relationship of foreign direct investment inflow (FDI inflow) to economic growth of Thailand during the period of 2006 to 2016. The analysis used the simple linear regression model. Aside from assessing the relationship of FDI inflow and GDP of the country, the relationship of the variables for major 11 sectors of the Thai industries were also studied. The results showed that total FDI inflow had a positive effect on the economic growth of Thailand. However, when analyzing each sector, the results indicate that FDI inflow had a significant effect on the GDP of 4 sectors including electricity, gas, steam and air conditioning; construction; transportation and storage, and a group of poorly defined sectors. For the other 7 sectors, FDI inflow did not have a significant effect. [ABSTRACT FROM AUTHOR]

Empirical studies on international trade highlight the role of innovation on international exchange but do not capture the effect of technological innovation when unobservable common factors (UCFs) are considered. This paper examines the long‐run relationship between technological innovation and international exchange using panel data for eight African countries over the period 1981–2013. The non‐stationarity and cointegration between technological innovation, international exchange, public investment, real gross domestic income and foreign direct investment were examined, controlling for cross‐sectional dependence and heterogeneity between countries. The results suggest that technological innovation in Africa remains low after controlling for UCFs, while public investment, real gross domestic product and foreign direct investment have significant impact on international exchange. Moreover, the results from the homogeneous and heterogeneous estimates, with and without UCFs, show that ignoring UCFs is likely to bias the coefficients. These findings reveal that African countries should invest more in public infrastructures and research and development to upgrade their capability To play an active role in the international market. [ABSTRACT FROM AUTHOR]

In today's world, globalization and the integration of economic ties are taking place intensively, and capital mobility is increasing. However, international practice shows that foreign investment can have both positive and negative effects on the country's economy. In this paper, the author examines the effects of foreign direct investment in the economy of the Russian Federation on the basis of testing two hypotheses on the basis of statistical analysis and macroeconomic modeling. The first is related to the assessment of the economic impact on the donor country based on the modified difference model of the multiplier-accelerator. The second hypothesis is based on a test of the impact of foreign investment on the host economy, based on the elasticity of external and domestic investment flows. The study identifies several target groups for analysis: regions that are active donors of investments and regions in which foreign investment flows are low. The comparison of the effects of foreign investment in these target groups allowed the author to give a more accurate description of the hypotheses about the nature of the consequences of foreign investment in the regions of the Russian Federation. [ABSTRACT FROM AUTHOR]

In the late 1990s, the World Bank and the International Monetary Fund (IMF) initiated a series of debt relief programs for highly indebted poor countries (HIPCs) based on the idea that high levels of indebtedness impede growth by discouraging domestic and foreign investment. This paper examines the relationship between external debt and growth with a focus on the effects of multilateral debt relief. In particular, we use a sample of 33 least developed countries (LDCs) over the period 1970- 2010 to explore the impact of indebtedness on growth before and after participating in the debt relief initiatives. In contrast to previous studies, we employ a combination of parametric and nonparametric methods to investigate the linear and nonlinear aspects of the debt-growth relationship. In the non-parametric analysis, we model growth as a discreet-time Markov process and estimate the transition probabilities for HIPCs. The results show that lower debt levels stimulate economic growth. The average impact of debt on growth in HIPCs becomes negative at about 64 -78% of GDP depending on the initial growth conditions. In the period after joining the debt relief initiatives, HIPCs generally exhibited a higher chance of moving towards or persisting in the positive range of growth. However, this process was related to lower debt levels mostly in countries that had initially exhibited moderate to rapid growth, while debt relief seems to have been less relevant for future growth in countries that started off in a state of moderate economic decline. Furthermore, the results of the regression analysis show that the marginal effect of public and publicly guaranteed (PPG) debt on growth is negative and significant. Debt relief programs were found to mitigate the negative impact of debt, both after their initiation in 1996 and after the HIPCs reached their decision point. Generally, the overarching policy that can be drawn from this paper is that LDCs, and HIPCs in particular, should strive to reduce their PPG debt levels to at least below 64%-78% of GDP in order to experience and maintain positive growth rates, ceteris paribus. Notwithstanding, our findings also suggest that if HIPCs, and LDCs in general, want to reduce or maintain their debt to sustainable levels, they should adopt some of the conditions imposed by the international financial institutions on HIPCs as part of their macroeconomic policy framework, such as developing and implementing a poverty reduction strategy through a broad based participatory process. [ABSTRACT FROM AUTHOR]

This paper uses annual balanced panel data to examine the Granger causal link between foreign direct investment (FDI) and economic growth (measured by real GDP growth) for 23 African countries covering the period from 1970 to 2011. Using recently developed panel econometric techniques the present paper takes into account non-stationary and cross-section dependency in the dataset when analyzing the growth-FDI nexus. The empirical results indicate two-way Granger causality link between FDI and economic growth. Furthermore, we show that this causal link is not homogeneous among individual countries in our sample. More specifically, we observe unidirectional causality from FDI to GDP growth in Egypt, Gabon, and Mauritania, and from GDP growth to FDI in Côte d'Ivoire, Kenya, South Africa and Zambia. Our main finding remains robust to estimation between FDI as a fraction of gross capital formation and real GDP growth. [ABSTRACT FROM AUTHOR]

This paper attempts to examine the growth impact of foreign aid in Cambodia over the period 1980-2014, using the autoregressive distributive lag (ARDL) bounds testing approach. The study also incorporates investment and trade openness into the model. The empirical findings show that trade openness has positive effects on growth in both the short run and the long run; investment has positively contributed to growth in the long run while foreign aid has positive impact on growth only for the short run. On the contrary, in the long run, it has negative impact on investment and growth. This can be suggested that dependence on foreign aid for long periods of time does not positively contribute to investment and growth in Cambodia. In order to achieve sustainable growth and enhanced industrialization, policy-makers should move from aid dependence to promote investments through elevating domestic and foreign capital in the country. [ABSTRACT FROM AUTHOR]

The purpose of this paper is to provide an integrated overview of the inflow of foreign capital in the form of foreign direct investment in the country from its independence until the end of 2012. In that sense, we analyze the volume of foreign direct investment from 1993 until 2012, their divisional structure and the structure by country of origin of capital and their share in the gross domestic product. According to data, so far the most attractive sectors for foreign capital is the service sector, and most of the FDI has European origin. Leading position in foreign investment countries have The Netherlands. In order to present a wider picture for the amount of investment we compare the inflow in R. of Macedonia with the inflows in the surrounding countries. The data shows that R. of Macedonia according to the amount of inflow of foreign direct investment is on the bottom of the countries in Southeast Europe. In order to see the effects of the foreign direct investment, effects are analyzed in terms of the added value of gross domestic product, the effects in terms of employment and the effects in terms of transfer of technology. This paper analyzes the factors affecting the inflow of foreign direct investment and institutional framework in which their inflow performs. Based on the given analysis the paper derives appropriate conclusions and recommendations that stand as challenges to the economic development of the Republic of Macedonia. [ABSTRACT FROM AUTHOR]

FDIs are considered a key engine to enhance economic growth both in developed and emerging economies, through various channels such as technology transfer, human and physical capital accumulation, commercial channel. The present paper aims at emphasizing the strong, long - term impact of FDI inflows on economic growth through the volume of exports. Using data over the period 1990 - 2012, the article has proved the existence of an important influence exerted by foreign inflows on the GDP growth rates based on a Johansen Co-integration and VECM analysis. Further research will be developed through a panel study on developed and developing economies. [ABSTRACT FROM AUTHOR]

Foreign direct investment (hereinafter FDI) is generally considered to be an instrument how to stimulate economic growth of any country. For this purpose governments of transition countries try to encourage the inflow of foreign direct investment by various measures. There are several theories and approaches to this problem that, on the one hand, support the claims about the positive effects of FDI on the economy but on the other hand, they also counter these arguments. The aim of this paper is to analyse the relation between foreign direct investment, economic growth and export in Estonia. Estimation of effects on economic growth and export was performed in the period from 1997 to 2012. The co-integration method and vector error correction model were applied on quarterly data. The results confirm the existence of long-term relation between the variables analysed. We reveal a negative impact of foreign direct investment and positive impact of gross domestic product on export. Next we reveal a positive impact of foreign direct investment and export on gross domestic product. [ABSTRACT FROM AUTHOR]

Capital stock is possessing pivotal importance in stimulating the economic growth and development of any country. Inward FDI is considered as one of the important catalysts of economic development particularly for the resource and capital poor countries. In this article we have examined the relationship between inward FDI and economic growth in case of one of the emerging economies of Latin America i.e., Brazil. We took annual time series data for the dependent and independent variables like inward FDI, per capita Gross Domestic Product (GDP), employment, capital formation, and exports for the period ranging from 1996 to 2019. We ran Ordinary Least Square Regression and Random Effect Regression Analysis for gauging the nature of relationship between the variables as well as for testing the robustness of the results. We found that FDI has a positive and significant relationship with GDP and the exports. Whereas, FDI has insignificant relationship with the employment and capital formation. The article holds an important policy implication for the other developing countries of Latin America; they need to attract good amount of inward FDI to achieve the robust economic growth and development. [ABSTRACT FROM AUTHOR]

The main purpose of this paper is to investigate relationship between foreign direct investment and economic growth based on 14 European Transition Economies for the period 1995 to 2014. Empirical model includes GDP per capita growth (% annual), foreign direct investment, net inflows (% GDP) and composite index which is developed with PCA to see the effect of determinants of FDI on GDP as an independent variable. Firstly homogeneity and cross sectional dependence among units are examined with Delta and CDLM tests and it is found that all series have heterogeneity and cross sectional dependency. For that reason, second generation Multifactor error structure (Pesaran et al, 2013) panel unit root test is used and it is also taken into account effect of unobserved common factors as a prerequisite of CCE Model just after proving the co-integration relationship and causality between variables via of Durbin-Hausmann (Westerlund, 2008) co-integration and Dumetriscu-Hurlin (2012) causality tests. Obtained results strongly support one-way causality from foreign direct investments and composite index to economic growth. Unfortunately, there is no causality between foreign direct investments and composite index. The findings indicate that foreign direct investments contribute negatively to economic growth in contrast to theory points out but determinants of FDI contribute positively at European transition countries. The results show that in Albania, Latvia, Romania and Slovenia foreign direct investments and composite index have positive contributions to economic growth in contrast to Bulgaria, Bosnia and Herzegovina, Macedonia, Slovak Republic. Some countries have special and opposite situation. For example; in Croatia, Czech Republic, Hungary, Estonia and Lithuania FDI has negative coefficients but composite index has positive coefficients. Poland is the only exception for composite index has negative but FDI has positive contribution to the economic growth. [ABSTRACT FROM AUTHOR]

Abstract: Globalisation has led to a rapid increase in the growth of foreign direct investment (FDI) globally. Over the last decade China has become the largest recipient of FDI whilst simultaneously increasing its outward FDI dramatically. The growth in China''s outward FDI has attracted little attention from scholars in mainstream research publications. The motivation behind this paper is to investigate the factors driving this growth from both economic and strategic backgrounds. The paper employs panel data analysis covering the period 2003–2009 where we quantify the main drivers of China''s outward FDI across a range of variables including bi lateral and multi lateral trade, market size, GDP growth, openness and resource endowment. [Copyright &y& Elsevier]

Uganda, in an attempt to accelerate growth and development, has been encouraging foreign direct investment (FDI) through privatization programmes and generous incentive packages such as tax holidays and exemptions. However, the Ugandan experience shows that to attract FDI, macroeconomic and political stability and policy consistency are much more important than such incentive schemes. The paper discusses infrastructure and institutional bottlenecks that act as deterrents to FDI. The paper uses time series data to investigate the FDI-growth linkage. The empirical results indicate that FDI has a positive impact on GDP growth in Uganda. [ABSTRACT FROM AUTHOR]

This paper investigates the impact of Chinese activities in sub-Saharan African countries with respect to the growth performance of economies in that region. Using a Solow-type growth model and panel data for the period 1991 to 2010, we find that African economies that export natural resources have benefited from positive terms-of-trade effects. In addition, there is evidence for displacement effects of African firms due to competition from China. On the other hand, Chinese foreign investment and aid in Africa does not appear to have a significant impact on African growth. [ABSTRACT FROM AUTHOR]

In this paper we present a discussion on current energy and power situation of the country, and examine the causal relationship between FDI in the energy and power sector, and economic growth in Bangladesh for the period 1972–2010. Related trend reveals a considerable gap between energy production and energy use during this period. Moreover, inflow trend of FDI was also fluctuating over the studied period. We also find that there are robust positive and unidirectional short-run causal relationships running from FDI to energy use and from energy use to GDP growth. Empirical results also confirm a causal relationship for the energy use equation in the long run. Considering the resource and technology gap and requirements for the development of the energy and power sector, FDI should be encouraged to this sector that would be imperative to the targeted GDP growth. [ABSTRACT FROM AUTHOR]

Despite China's remarkable economic growth over the last three decades have been well acknowledged, there seems no consensus being reached on how this growth is created and whether it can be sustained in the future. While some economists (e.g., Holz, 2008) argue that "China's potential for economic growth from relatively low labor costs will continue to exist for another 30 years", others (e.g., Hofman and Kuijs, 2008, Prasad, 2009, Whalley and Xin, 2010) have questioned its sustainability. Based on a brief literature review and with the help of a well-known CGE model (the GTAP model), this paper attempts to identify the most significant factors that have contributed to the miraculous economic growth in China, namely international trade, FDI, and migrant labor, and to explore how some other economic potentials such as the removal of the household registration system and engaging free trade with its major trade partners could be further exploited. The GTAP is a multi-region, multi-sector CGE model that has been used widely to tackle many economic and trade policy issues in developing countries. The latest version of the dataset which is based on 2007 actual data is used for running two sets of eight counter-factual simulations. According to the results of the simulations, it is concluded that the export-orientation development strategy, effective use of FDI, and exploitation of comparative advantage of its migrant workers are the most significant factors that have contributed to the remarkable economic growth in China. While the opening effect accounts for roughly 40% of GDP growth, the effective use of the migrant workers contributes to about 50%, leaving the remaining 10% or less as the contribution of TFP. Although not all of these factors will persist in the future, several alternative reform measures including the removal of the household registration system and further liberalising international trade through forming FTAs with its major trade partners would keep contributing to sustain China's economic growth. The policy implication is that China should continue its opening and reform policies toward developing a more liberalised domestic factor market and engaging more FTAs with its major trading partners. When these economic potentials are further exploited, China's rapid economic growth can be sustained further for at least another decade. [ABSTRACT FROM AUTHOR]

Theoretically, inward foreign direct investments (FDI) can sustain the economic development of the host country due to their contribution to the increase in productivity and competitiveness. Starting from this idea and based upon the latest theoretical and empirical research regarding the economic development stages this paper underlines the relationship between the FDI inflows and the economic development by analyzing two representative macroeconomic indicators namely GDP per capita and the inward FDI stock as percentage in GDP for 141 worldwide countries at the level of the year 2013. The analysis presented in this study revealed that besides the quantity of the foreign direct investments received by a country there are other important factors related to the FDI contribution at economic development, respectively the quality of the foreign capital, and the existing conditions in the host economy. [ABSTRACT FROM AUTHOR]

This paper analyzed drivers of foreign direct investments (FDI) to West Africa using a panel dataset from 1970 to 2010. OLS and GMM techniques are used for the estimations. The main results indicate that there is a U-shaped relationship between economic development and FDI inflows to West Africa. In summary: (i) The quadratic element of real per capita GDP, domestic investment, trade openness, first year lag of FDI, natural resources (oil and metals) endowment and exports, and monetary integration have positive and significant effect on FDI inflows to West Africa; and (ii) there is a negative relationship between FDI inflows to the sub-region and loan component of ODA, economic growth, level of economic development (real GDP per capita), life expectancy, and domestic credit to the private sector. [ABSTRACT FROM AUTHOR]

The analysis presented in this paper emphasize the applicability and the limitation of Investment Development Path (IDP) theory, taking into account the results of empirical studies that underlined the differences between the "narrow" and the "broad" version of the IDP framework. We analyse both in a static and dynamic manner, the specific indicators, respectively Gross Domestic Product per capita at PPP and Net Outward Investment /capita for the years 2005 and 2011, in the case of EU countries. The results of the analysis carried out for 27 Member States of the European Union demonstrate that the "narrow" version of the IDP is rather indicative, as the net outward investment position is not always accurately related to the level of economic development. Consequently, as some of the IDP theorists revealed, in order to analyse the relationship between foreign direct investment and economic development it is important to measure the quality of FDI received by a country. [ABSTRACT FROM AUTHOR]

Foreign direct investment (FDI) is considered to be one of the most important forces of economic growth and globalization. Many ASEAN economies have only a small domestic market; they are heavily reliant on international trade and FDI. Recent studies on cross-border investment indicate the importance of domestic economic performance and institutional effectiveness (including government effectiveness, regulatory quality, rule of law and property rights protection) in attracting FDI. The result from a cross-national empirical analysis, in this study, also confirms the significant impact of macroeconomic performance and institutional factors on FDI flows into developing countries. In this paper, it is argued that, with the exception of Singapore, most ASEAN countries are afflicted with relatively poor institutions for good governance, with low government effectiveness, and poor regulatory quality and rule of law. This relatively poor institutional quality may exacerbate the effects of external threats. As higher economic growth and better economic integration in other regions may divert FDI flows into ASEAN countries, their appropriate response is to improve institutional quality so that the share of FDI will increase in the total FDI inflows. Improving the institutional environment among ASEAN member countries should, therefore, be an important goal of ASEAN economic integration. [ABSTRACT FROM PUBLISHER]

Abstract: This paper identifies emerging trends in the world economy during the next decade. The first is that China will overtake the U.S. in terms of gross domestic product (GDP), ending more than a century of U.S. leadership as the world''s largest economy. The second is that Developing Asia, excluding Japan, will overtake the G7, a group of the seven largest industrialized economies established in 1975–76. Finally, India will overtake Japan, Russia will overtake Germany, and Brazil will overtake the U.K., leading to a New World Economic Order: China, the U.S., India, Japan, Russia, Germany, and Brazil. [Copyright &y& Elsevier]

Abstract: This paper addresses the impact of both economic growth and financial development on environmental degradation using a panel cointegration technique for the period between 1980 and 2007, except for Russia (1992–2007). In long-run equilibrium, CO2 emissions appear to be energy consumption elastic and FDI inelastic, and the results seem to support the Environmental Kuznets Curve (EKC) hypothesis. The causality results indicate that there exists strong bidirectional causality between emissions and FDI and unidirectional strong causality running from output to FDI. The evidence seems to support the pollution haven and both the halo and scale effects. Therefore, in attracting FDI, developing countries should strictly examine the qualifications for foreign investment or to promote environmental protection through the coordinated know-how and technological transfer with foreign companies to avoid environmental damage. Additionally, there exists strong output-emissions and output-energy consumption bidirectional causality, while there is unidirectional strong causality running from energy consumption to emissions. Overall, the method of managing both energy demand and FDI and increasing both investment in the energy supply and energy efficiency to reduce CO2 emissions and without compromising the country’s competitiveness can be adopted by energy-dependent BRIC countries. [ABSTRACT FROM AUTHOR]

This paper uses recently developed econometric techniques such as panel unit roots tests, panel cointegration, and panel generalized method of moment (GMM) to investigate the existence and the nature of the dynamic causal relationships among GDP, exports, and Foreign Direct Investment (FDI) inflows for 57 developing countries from 1981 to 2006. The findings reveal that in the long-run equilibrium, exports and FDI inflows Granger cause GDP, and also exports and GDP do it for FDI inflows. The results also provide evidence of short-run causality running from exports and FDI inflows to GDP. On the other hand, GDP and FDI inflows do not cause exports in either the short run or the long run. Finally, the results of the strong causality are parallel to those of the long run causality. [ABSTRACT FROM AUTHOR]

Despite plausible theoretical grounds for presuming a positive relationship between foreign direct investment inflows (FDI) and economic growth, existing empirical evidence on this nexus is inconclusive. In an effort to add to the empirical literature, this paper estimates the relationship between FDI and the rate of growth of GDP using a stochastic frontier model and employing panel data covering 45 countries over the period 1997 to 2004. We find that FDI inflows exert a positive impact on economic growth only in the presence of a highly skilled labour; corruption has a negative impact on economic growth; and trade openness increases economic growth by means of efficiency gains. [ABSTRACT FROM AUTHOR]

In this paper a study on the impact of Foreign Direct Investment on Economic Growth in 14 Latin American countries is presented. With this purpose the relationship of Foreign Direct Investment per capita with Gross Domestic Production per capita variation (as a proxy for Economic Growth) and Private Capital per capita variation during the period 1996-2003 were analyzed. A model with two simultaneous equations that are solved using fixed-effects panel for both analysis of countries and the study of the time effect. The results allows concluding that for those countries studied the Foreign Direct Investment boosts both the Private Capital per capita accumulation and the Income per capita growth. The Institutional Quality, mainly that related to private property rights protection and individual freedom, are determining factors for Growth. It was finally found that Public Investment also boosts Growth and the countries considered in the analysis show conditional convergence, which is consistent with the mainstream literature. [ABSTRACT FROM AUTHOR]

This paper studies the grey relational grade of financial variables to the economic growth in China. The result is that the credit of the financial intermediary, is playing the most important role on the growth of GDP, foreign investment fund ranks the next, and the fund from the stock market ranks the end. Therefore, the economic development of China is highly dependent on the financial intermediary and foreign investment, less related to the stock market. [ABSTRACT FROM AUTHOR]

This paper analyses the relationship between per capita GDP growth and investment, foreign direct investment, labour force growth, government expenditure and urban infrastructure based on the data for 189 large and medium-sized Chinese cities for the period of 1991–98. Cross-sectional analyses indicate that several factors, such as foreign investment, paved roads and government expenditure on science and technology are positively related to per capita GDP growth, while the overall size of government, measured by total government spending share in GDP, appears negatively related to per capita GDP growth. Contrary to the literature on economic growth, total investment share in GDP is insignificantly related to per capita GDP growth. Also, there is no clear evidence of convergence in per capita GDP among Chinese cities. [ABSTRACT FROM AUTHOR]

Understanding the relationship between Gross Domestic Product (GDP), export and Foreign Direct Investment (FDI) is inevitable for better formulation and implementation of policy decisions aimed at economic growth. This paper aims at understanding recent economic policies of the Government of India, which are oriented towards a more liberal approach, especially meant for promoting export and for attracting foreign capital. The existing debate over the relationship between these factors (i.e., GDP, FDI & export) and the curiosity about the nature of this relationship after the policy change in the 1990s motivated this study to investigate the causal relationship between these variables. The present study investigates the causal relationship between GDP, FDI and export by employing quarterly time series data from 1996Q1 to 2017Q2. As most of the previous studies are constrained by the issue of spurious regression due to stationarity problem, this study applies a modified Granger Causality test (1969) proposed by Toda and Yamamoto (1995) within Vector Autoregressive (VAR) framework as an attempt to solve the stationarity issues. The empirical evidence showed a bidirectional causality running between GDP and export and failed to find any relationship between FDI and GDP. Furthermore, VAR residual serial correlation LM test and the inverse root of AR characteristic polynomial confirms the stability of an augmented VAR model and non- existence of serial correlation. Based on the result, the study suggests that there should be more liberal policies to improve the FDI flow and to facilitate sustainable export-oriented growth. [ABSTRACT FROM AUTHOR]