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 rather inconclusive. In this paper, exploiting the information of a disaggregated dataset on a panel of 14 manufacturing sectors for (a sample of) developed and developing countries over the period 1992 -2004, we are able to provide robust evidence on the positive and statistically significant growth effect of FDI in recipient countries. Moreover, we find that this effect is stronger in capital intensive and technologically advanced sectors. The growth enhancing effect comes primarily from an increase in total factor productivity (TFP) and from factors accumulation. Our results are robust to the inclusion of other determinants of economic growth and to controlling for potential endogeneity.
Pozzolo, A., Cipollina, M., Govannetti, G., Pietrovito, F. (2012). FDIs and growth: What cross-country industry data say. WORLD ECONOMY, 35 [doi:10.1111/j.1467-9701.2012.01478.x].
FDIs and growth: What cross-country industry data say
POZZOLO A;
2012-01-01
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 rather inconclusive. In this paper, exploiting the information of a disaggregated dataset on a panel of 14 manufacturing sectors for (a sample of) developed and developing countries over the period 1992 -2004, we are able to provide robust evidence on the positive and statistically significant growth effect of FDI in recipient countries. Moreover, we find that this effect is stronger in capital intensive and technologically advanced sectors. The growth enhancing effect comes primarily from an increase in total factor productivity (TFP) and from factors accumulation. Our results are robust to the inclusion of other determinants of economic growth and to controlling for potential endogeneity.I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.
