FDI and growth: A new look at a still puzzling issue

Dalila Nicet-Chenaf and Eric Rougier
Authors registered in the RePEc Author Service: Dalila Nicet - Chenaf ()

Cahiers du GREThA (2007-2019) from Groupe de Recherche en Economie Théorique et Appliquée (GREThA)

Abstract: In this paper, we argue that the inadequacy of their underlying formal model can explain the failure of the existing empirical studies to exhibit a robust and convergent estimation of the effect of FDI on growth. We build a structural model of growth with endogenous attraction to FDI, and we estimate it on panel data for a sample of Middle East and North Africa countries (MENA). Direct effects of FDI on growth are not significant, and we show that FDI is not only responsive to growth, but it is also likely to promote increases of GDP through indirect channels as it spurs the formation of human capital and exports.

Keywords: FDI; growth; attraction; MENA; simultaneous equations (search for similar items in EconPapers)
JEL-codes: F21 F43 O11 O15 (search for similar items in EconPapers)
Date: 2009
New Economics Papers: this item is included in nep-ara, nep-dev, nep-fdg and nep-int
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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Related works:
Working Paper: FDI and growth: a new look at a still puzzling issue (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:grt:wpegrt:2009-13

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