Title

Foreign Direct Investment and Economic Growth: The Growth Accounting Perspective

Document Type

Article

Language

eng

Format of Original

10 p.

Publication Date

2009

Publisher

Wiley

Source Publication

Economic Inquiry

Source ISSN

0095-2583

Abstract

A positive relationship between FDI and economic growth under two economic conditions has been estimated: a sufficient level of human capital and well-developed financial markets, respectively. However, these two conditions can be fundamentally different catalysts for FDI to promote economic growth in the perspective of growth accounting. Using data from 69 countries over 1970–1989, we find that FDI promotes productivity growth only when the host country reaches a threshold level of human capital; and FDI promotes capital growth only when a certain level of financial development is achieved.

Comments

Accepted version. This is the peer reviewed version of the following article: Wang, Miao and Wong, Sunny. “Foreign direct investment and economic growth: the growth accounting perspective”. Economic Inquiry, Vol. 47, No. 4 (October 2009): 701-710, which has been published in final form at here: DOI. This article may be used for non-commercial purposes in accordance With Wiley Terms and Conditions for self-archiving.

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