Foreign Direct Investment, Trade Policy and Economic Growth

V. N. Balasubramanyam, M. A. Salisu and David Sapsford

Chapter 1 in Trade and Development, 1996, pp 3-21 from Palgrave Macmillan

Abstract: Abstract The factors that determine the magnitude of foreign direct investment (FDI) in various developing countries and the role that FDI plays in the growth process have for long been topics of intense debate. Jagdish Bhagwati’s work has provided major insights into these two issues, and in this chapter we test empirically the twin hypotheses concerning FDI propounded by Bhagwati. Bhagwati has argued persuasively that both the magnitude and the effectiveness of FDI in promoting economic growth are higher in those countries that pursue an export promotion (EP) trade policy than in those countries that adopt an import substitution (IS) policy orientation.

Keywords: Foreign Direct Investment; Gross Domestic Product; Trade Policy; Trade Strategy; Foreign Capital (search for similar items in EconPapers)
Date: 1996
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Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-1-349-25040-0_1

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DOI: 10.1007/978-1-349-25040-0_1

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