FDI and Growth: What Cross-Country Industry Data Say
Government of the Italian Republic (Italy), Ministry of Economy and Finance, Department of the Treasury Working Paper No. 10
39 Pages Posted: 12 Dec 2011 Last revised: 30 Jul 2012
There are 3 versions of this paper
FDI and Growth: What Cross-Country Industry Data Say
FDI and Growth: What Cross-Country Industry Data Say
FDI and Growth: What Cross-Country Industry Data Say
Date Written: December 1, 2011
Abstract
The theoretical literature has discussed different channels through which foreign direct investments (FDI) promote host country’s economic growth, but empirical analyses have so far been inconclusive. In this paper we provide evidence that FDI have a positive and statistically significant growth effect in recipient countries, using a panel of 14 manufacturing sectors for (a sample of) developed and developing countries over the period 1992-2004. This effect is stronger in capital intensive and in technologically advanced sectors, and comes primarily from an increase in labor productivity, suggesting that FDI not only contribute to physical capital accumulation, but also generate positive technological spillovers. The policy implications of our findings are important, especially for developing countries, where the growth enhancing promotion of foreign investment in capital intensive and technologically advanced sectors is at the heart of the debate.
Keywords: foreign direct investment, economic growth, capital intensity, technological progress, patents, labor productivity
JEL Classification: F23, F36, F43, O16
Suggested Citation: Suggested Citation
Do you have negative results from your research you’d like to share?
Recommended Papers
-
By David T. Coe and Elhanan Helpman
-
By David T. Coe
-
International R&D Spillovers and Institutions
By David T. Coe, Elhanan Helpman, ...
-
International R&D Spillovers and Institutions
By David T. Coe, Elhanan Helpman, ...
-
International R&D Spillovers and Institutions
By David T. Coe, Elhanan Helpman, ...
-
Are There International R&D Spillovers Among Randomly Matched Trade Partners?: A Response to Keller
-
By David T. Coe, Elhanan Helpman, ...