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How do South-South and North-South FDI affect total factor productivity growth in developing countries?

Author

Listed:
  • Peter Kannen

    (Helmut-Schmidt-University Hamburg)

  • Julian Donaubauer

    (Helmut-Schmidt-University Hamburg)

  • Dierk Herzer

    (Helmut-Schmidt-University Hamburg)

Abstract

This study uses a unique dataset to examine not only the effect of total FDI on TFP growth in a large sample of developing countries but also, and especially, the productivity growth effects of South-South versus North-South FDI. It is found that total FDI has a significant positive effect on TFP growth in developing countries. However, this effect is driven by North-South FDI; while South-South FDI is insignificant and sometimes negative, North-South FDI exerts a statistically significant positive effect on TFP growth in developing countries.

Suggested Citation

  • Peter Kannen & Julian Donaubauer & Dierk Herzer, 2017. "How do South-South and North-South FDI affect total factor productivity growth in developing countries?," Economics Bulletin, AccessEcon, vol. 37(1), pages 429-439.
    • Handle: RePEc:ebl:ecbull:eb-16-00711
    as

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    References listed on IDEAS

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    More about this item

    Keywords

    FDI; TFP; Developing countries;
    All these keywords.

    JEL classification:

    • F2 - International Economics - - International Factor Movements and International Business
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity

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