The Effect of Foreign Direct Investment on Economic Growth

Sergey Kondyan, Karine Yenokyan

Research output: Contribution to journalArticle

Abstract

We develop a theoretical model that studies the effects of FDI on growth in the absence of channels through which the spillover effects of FDI operate. By isolating the effects of FDI, we examine how FDI affects growth through its primary function of capital accumulation. Untangling the growth effects of FDI operating through capital accumulation from the spillover effects of FDI can help explain the ambiguity in the empirical evidence on the subject. The transitional dynamics are characterized by the interdependence of the variables of the source and recipient countries. We study the dynamic system through the model calibration analysis.

Original languageEnglish
JournalEastern Economic Journal
DOIs
Publication statusPublished - Jan 1 2019

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Economic growth
Foreign direct investment
Spillover effects
Capital accumulation
Empirical evidence
Model calibration
Interdependence
Dynamic systems
Transitional dynamics

Keywords

  • Foreign direct investment
  • Growth
  • Transitional dynamics

ASJC Scopus subject areas

  • Economics and Econometrics

Cite this

The Effect of Foreign Direct Investment on Economic Growth. / Kondyan, Sergey; Yenokyan, Karine.

In: Eastern Economic Journal, 01.01.2019.

Research output: Contribution to journalArticle

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