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The Impact of Foreign Direct Investment on Economic Growth – An Empirical Analysis of Different Effects in Less and More Developed Countries

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  • Thomas Brenner

    (Economic Geography and Location Research, Philipps-University, Marburg)

Abstract

This paper studies the effects of foreign direct investment (FDI) on national economic growth with the help of GMM panel regressions. Effects on productivity growth, capital and labor inputs as well as innovation activities are distinguished. Furthermore, less and more developed countries as well as the time periods 1974-1991 and 1992-2009 are studied separately. Effects of FDI on production capacities are found for more developed countries in the first time period, while effects on innovation activities are found for the medium developed countries in the latter time period. Effects in less developed countries are rather negative.

Suggested Citation

  • Thomas Brenner, 2014. "The Impact of Foreign Direct Investment on Economic Growth – An Empirical Analysis of Different Effects in Less and More Developed Countries," Working Papers on Innovation and Space 2014-05, Philipps University Marburg, Department of Geography.
    • Handle: RePEc:pum:wpaper:2014-04
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    References listed on IDEAS

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    More about this item

    Keywords

    growth; foreign direct investment; FDI; growth effects; panel GMM;
    All these keywords.

    JEL classification:

    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • E10 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - General
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business

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