Foreign Direct Investments, Technology Transfer and Economic Growth. A Panel Approach

Oana Simona Hudea Caraman () and Stelian Stancu ()
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Oana Simona Hudea Caraman: Academy of Economic Studies, Bucharest
Stelian Stancu: Academy of Economic Studies, Bucharest

Journal for Economic Forecasting, 2012, issue 2, 85-102

Abstract: This paper calls into question the existing of a direct and positive impact of foreign direct investments on economic growth. Considering that many controversial results have been caused by the use of cross-country or time-series investigations that do not reveal all facets of this complex issue, we resorted to panel data, thus capturing the continuously evolving country-specific differences. Our study, made on seven East- European countries, during 1993-2009, is based on panel OLS / GMM fixed and random effect estimations, panel cointegration and causality analysis. The results not only reveal a direct and positive influence of foreign direct investments on gross domestic product, both in the short and in the long-run, therefore reducing the technological gap with more developed countries, but they also render a reverse causality running from GDP to FDI.

Keywords: economic growth; foreign direct investments; absorption capacity; longrun equilibrium; bi-directional causality (search for similar items in EconPapers)
JEL-codes: F21 F43 (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (13)

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