FOREIGN DIRECT INVESTMENT AND ECONOMIC GROWTH: TAKING STOCK OF THE CURRENT STATE OF EMPIRICAL RESEARCH

Darko Horvatin
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Darko Horvatin: Croatian Pension Investment Company, Zagreb, Croatia

Poslovna izvrsnost-Business Excellence, 2019, vol. 13, issue 2, 179-201

Abstract: Taking into account foreign direct investment theory and neoclassical and endogenous theories of economic growth, FDI has been identified as a factor that can influence growth directly through capital accumulation and indirectly through technology transfer. However, empirical findings remain highly diverse. The purpose of this paper is to critically review the current state of empirical research on the impact of FDI on the recipient country’s economic growth, while also considering global FDI inflows from 1970 to the present. The general finding is that there is no unanimous conclusion: the impact ranges from very positive to neutral, or even negative. Ambiguous findings stem from analytical weaknesses, including the way samples are constructed and insufficient differentiation between short-term and long-term effects.

Keywords: FDI; economic growth; greenfield investment; mergers and acquisition (search for similar items in EconPapers)
Date: 2019
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Persistent link: https://EconPapers.repec.org/RePEc:zag:busexc:v:13:y:2019:i:2:p:179-201

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