The Effect of Foreign Direct Investment on Economic Growth

Sergey Kondyan, Karine Yenokyan

Research output: Contribution to journalArticlepeer-review

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
Pages (from-to)532-564
Number of pages33
JournalEastern Economic Journal
Volume45
Issue number4
DOIs
Publication statusPublished - Oct 1 2019

Keywords

  • Foreign direct investment
  • Growth
  • Transitional dynamics

ASJC Scopus subject areas

  • Economics and Econometrics

Fingerprint Dive into the research topics of 'The Effect of Foreign Direct Investment on Economic Growth'. Together they form a unique fingerprint.

Cite this