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Foreign Direct Investments, Technology Transfer and Economic Growth. A Panel Approach

Author

Listed:
  • Hudea Caraman, Oana Simona

    (Academy of Economic Studies, Bucharest)

  • Stancu, Stelian

    (Academy of Economic Studies, Bucharest)

Abstract

This paper calls into question the existing of a direct and positive impact of foreign direct investments on economic growth. Considering that many controversial results have been caused by the use of cross-country or time-series investigations that do not reveal all facets of this complex issue, we resorted to panel data, thus capturing the continuously evolving country-specific differences. Our study, made on seven East- European countries, during 1993-2009, is based on panel OLS / GMM fixed and random effect estimations, panel cointegration and causality analysis. The results not only reveal a direct and positive influence of foreign direct investments on gross domestic product, both in the short and in the long-run, therefore reducing the technological gap with more developed countries, but they also render a reverse causality running from GDP to FDI.

Suggested Citation

  • Hudea Caraman, Oana Simona & Stancu, Stelian, 2012. "Foreign Direct Investments, Technology Transfer and Economic Growth. A Panel Approach," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(2), pages 85-102, June.
    • Handle: RePEc:rjr:romjef:v::y:2012:i:2:p:85-102
    as

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    References listed on IDEAS

    as
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    2. repec:jes:wpaper:y:2012:v:4:p:668-692 is not listed on IDEAS
    3. Alexandra ADAM & Silvia Elena IACOB, 2012. "Consequences and possible solutions of financial crisis," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania / Editura Economica, vol. 0(12(577)), pages 142-148, December.
    4. Predrag TRPESKI & Marijana CVETANOSKA & Kristijan KOZHESKI, 2021. "The Impact Of Foreign Direct Investments On Economic Growth And Trade: A Panel Approach Of Selected Western Balkan Countries," Management Research and Practice, Research Centre in Public Administration and Public Services, Bucharest, Romania, vol. 13(3), pages 23-31, September.
    5. Bojnec, Štefan & Ferto, Imre, 2014. "Outward Foreign Direct Iinvestments and Merchandise Exports: The European OECD Countries," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(2), pages 87-99, June.
    6. KARGI, Bilal, 2014. "Portfolio in Turkish Economy, and A Long Termed Relation Between Foreign Direct Investments and The Growth, and The Structural Breakage Analysis (1980-2012)," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 6(1), pages 70-81.
    7. Iwasaki, Ichiro & 岩﨑, 一郎 & Tokunaga, Masahiro, 2019. "The Determinants and Macroeconomic Impacts of Foreign Direct Investment in Transition Economies," CEI Working Paper Series 2019-8, Center for Economic Institutions, Institute of Economic Research, Hitotsubashi University.
    8. Zvezdanović Lobanova Jelena & Kračun Davorin & Kavkler Alenka, 2016. "Growth Effects of Cross-border Mergers and Acquisitions in European Transition Countries," Naše gospodarstvo/Our economy, Sciendo, vol. 62(4), pages 3-11, December.
    9. Oana Simona HUDEA, 2017. "Foreign Direct Investments – How Much You Can Get," SEA - Practical Application of Science, Romanian Foundation for Business Intelligence, Editorial Department, issue 15, pages 389-394, December.
    10. Iwasaki, Ichiro & Tokunaga, Masahiro, 2014. "Macroeconomic Impacts of FDI in Transition Economies: A Meta-Analysis," World Development, Elsevier, vol. 61(C), pages 53-69.
    11. Sebastian Florian Enea & Silvia Palaºcã, 2012. "Globalization Versus Segregation - Business Cycles Synchronization In Europe," CES Working Papers, Centre for European Studies, Alexandru Ioan Cuza University, vol. 4(4), pages 668-692, December.
    12. Azka Amin & Sofia Anwar & Xi‐Hua Liu, 2022. "Outward foreign direct investment and economic growth in Romania: Evidence from non‐linear ARDL approach," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 27(1), pages 665-677, January.

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    More about this item

    Keywords

    economic growth; foreign direct investments; absorption capacity; longrun equilibrium; bi-directional causality;
    All these keywords.

    JEL classification:

    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies

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