LONG RUN EQUILIBRIUM RELATIONSHIP BETWEEN INWARD FDI AND PRODUCTIVITY

Gwanghoon Lee ()

Journal of Economic Development, 2007, vol. 32, issue 2, 183-192

Abstract: By constructing a panel dataset from nine OECD countries for the period 1971-1999 and adopting up-to-date panel cointegration estimation methods, the paper shows the robustness of long run positive relationship between inward foreign direct investment and productivities of host countries. Especially, with group mean fully modified OLS, the estimation model allows common time dummies to control possible cross-sectional dependence and also allows heterogeneous cointegrating vectors for the members of cross section. The paper also confirms the long run equilibrium relationship between domestic knowledge stocks and productivities in G7 countries.

Keywords: Foreign Direct Investment; Productivity; Unit Root; Panel Cointegration (search for similar items in EconPapers)
JEL-codes: C23 F01 O30 O47 O57 (search for similar items in EconPapers)
Date: 2007
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Citations: View citations in EconPapers (11)

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Persistent link: https://EconPapers.repec.org/RePEc:jed:journl:v:32:y:2007:i:2:p:183-192

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