Foreign direct investment, Technology and Economic growth
Independent thesis Advanced level (degree of Master (Two Years)), 20 credits / 30 HE creditsStudent thesis
This paper examines the effect of both inward foreign direct investment (FDI) and outward FDI on economic growth using panel data of 46 countries in the period of 1996 to 2010. The results show that in developed and developing countries, outward FDI positively influences economic growth; this applies to not only home countries but also host countries. However, for inward FDI, in developed countries, negative effects are seen, and we interpret the latter as crowding out effects. It is also shown that research and development (R&D) as a determinant of FDI only works in countries that have reached a certain level of technology. Technology spillover seems to be more pronounced in developed countries than in developing countries. Hence, convergence appears when the technology gap is relatively small and not above a certain threshold. Beyond the threshold level, divergence will occur.
Place, publisher, year, edition, pages
2013. , 26 p.
Foreign direct investment, inward, outward, economic growth; R&D, technology gap;
IdentifiersURN: urn:nbn:se:kth:diva-142638OAI: oai:DiVA.org:kth-142638DiVA: diva2:703941