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Foreign Direct Investment, Human Capital And Nonlinearities In Economic Growth

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  • Thanasis Stengos

    (University of Guelph, Canada and The Rimini Centre for Economic Analysis, Italy)

  • Costantina Kottaridi

    (University of Peloponnese, Greece)

Abstract

This paper examines the effect of FDI on the process of economic growth by allowing the impact to differ both across each country and also across each time period. We apply non-parametric techniques taking into account the previously documented nonlinear effects of initial income and human capital on economic growth. We use a wide range of countries, both developed and developing in order to be able to distinguish potential differential effects between the two groups. Our findings suggest that FDI inflows have a moderately nonlinear effect on growth and that the human capital nonlinear effect in the presence of FDI inflows is similar to the one found elsewhere in the relevant literature.

Suggested Citation

  • Thanasis Stengos & Costantina Kottaridi, 2008. "Foreign Direct Investment, Human Capital And Nonlinearities In Economic Growth," Working Paper series 20_08, Rimini Centre for Economic Analysis.
    • Handle: RePEc:rim:rimwps:20_08
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    More about this item

    Keywords

    cross country growth regressions; FDI; human capital; semi-parametric additive model;
    All these keywords.

    JEL classification:

    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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