FDI, GROWTH AND LEVEL OF DEVELOPMENT: ANALYSIS OF 76 COUNTRIES FOR THE PERIOD 1980-2010

Stephen G. Grubaugh

Applied Econometrics and International Development, 2019, vol. 19, issue 2, 5-18

Abstract: Empirical studies of the relationship between Foreign Direct Investment (FDI) and economic growth have inconsistent conclusions. This study considers alternative estimation procedures, selection of conditioning variables, the interaction of FDI and other variables, and the sample of countries used as possible explanations Only by varying the sample of countries does this study generate a range of results for the effect of FDI on growth. Specifically, dividing countries by development level the estimated relationship between FDI and growth varies from negative and significant to insignificant to positive and significant. In general, parameter instability across development level is found.

Keywords: Foreign Direct Investment (FDI); economic growth; panel estimation; parameter stability. (search for similar items in EconPapers)
JEL-codes: F23 O19 O47 (search for similar items in EconPapers)
Date: 2019
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