The Effect of Foreign Direct Investment on Economic Growth

Sergey Kondyan; Karine Yenokyan

doi:10.1057/s41302-019-00140-9

The Effect of Foreign Direct Investment on Economic Growth

Sergey Kondyan, Karine Yenokyan

Economics Department

Research output: Contribution to journal › Article › peer-review

1 Citation (Scopus)

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 language	English
Pages (from-to)	532-564
Number of pages	33
Journal	Eastern Economic Journal
Volume	45
Issue number	4
DOIs	https://doi.org/10.1057/s41302-019-00140-9
Publication status	Published - Oct 1 2019

Keywords

Foreign direct investment
Growth
Transitional dynamics

ASJC Scopus subject areas

Economics and Econometrics

UN SDGs

This output contributes to the following UN Sustainable Development Goals (SDGs)

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10.1057/s41302-019-00140-9

Cite this

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AB - 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.

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KW - Transitional dynamics

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The Effect of Foreign Direct Investment on Economic Growth

Abstract

Keywords

ASJC Scopus subject areas

UN SDGs

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