Foreign Direct Investment, Institutional Framework and Economic Growth

Arshad Hayat ()

MPRA Paper from University Library of Munich, Germany

Abstract: The paper explores the role of institutional quality on economic growth and more specifically the role it plays through foreign direct investment. The paper uses an economic performance relevant indicators of institutional quality (both in aggregate and individual indicators) to evaluate its direct impact on economic growth and an indirect impact on economic growth via foreign direct investment. The paper applied instrumental variable model to a larger dataset of 106 countries and found that besides a strong direct positive effect on economic growth the aggregate institutional quality variable as well as all individual variables except for the rule of law have a small but significant indirect impact on economic that takes place through boosting foreign direct investment.

Keywords: Foreign Direct Investment; Institutional Quality; Economic Growth; Instrumental Variable (search for similar items in EconPapers)
JEL-codes: E14 F23 F43 (search for similar items in EconPapers)
Date: 2016-10-14
New Economics Papers: this item is included in nep-cse, nep-fdg, nep-gro, nep-int and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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https://mpra.ub.uni-muenchen.de/74563/1/MPRA_paper_74563.pdf original version (application/pdf)
https://mpra.ub.uni-muenchen.de/79043/9/MPRA_paper_79043.pdf revised version (application/pdf)
https://mpra.ub.uni-muenchen.de/91213/1/MPRA_paper_91213.pdf revised version (application/pdf)

Related works:
Working Paper: Foreign Direct Investments, Institutional Framework and Economic Growth (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:74563

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