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FDI Inflow Spillover Effect Implications On The Asia Pacific Productivity Growth Through The Export Channel

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  • Rahim KIA LASHAKI
  • Elsadig Musa AHMED

Abstract

This paper inspects the influence of Foreign Direct Investment (FDI) inflows on the catching up process developed by labour, physical capital, human capital, absorptive capacity, telecommunications investment, and export channel on Asia Pacific's sustainable productivity growth. A panel data from the period of 1970 to 2012 was used. The modified extensive growth theory model that is based on output approach was applied. Both growth accounting and econometric approaches were considered to estimating the parameters of variables in first step and in the second step productivity indicators were calculated. The results show that the FDI inflows and inputs used are input driven that was generally more predominant than total factor productivity (TFP) growth. Meanwhile, The GDP grew significantly during the periods of the study by development of human capital, export, and telecommunications investment (input driven) variables, which supported by FDI inflows. Accordingly, the impact of export channel on the TFP growth found to be positive with insignificant contribution in most the group selected countries.

Suggested Citation

  • Rahim KIA LASHAKI & Elsadig Musa AHMED, 2017. "FDI Inflow Spillover Effect Implications On The Asia Pacific Productivity Growth Through The Export Channel," Revista Galega de Economía, University of Santiago de Compostela. Faculty of Economics and Business., vol. 26(3), pages 57-72.
    • Handle: RePEc:sdo:regaec:v:26:y:2017:i:3_5
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