Endogenous Determination of FDI Growth and Economic Growth:The OECD Case

(2003)

1989 - 1996

1989 - 2000

Zhang & Ram
__________(2002)__________

85 countries
1990 - 1997

OLS

________________There is a positive relationship between FDI and economic growth in 1990s.________________

Carkovic & Levine
__________(2002)__________

72 developed and
developing
countries
1960 - 1995

OLS and GMM

FDI alone has no statistically significant affect on economic growth.

Alfaro, Chanda, Kalemli-
Ozcan & Sayek
(2002)

1. sample :

20 OECD
countries and 51
non-OECD
countries
1975 - 1995

2. sample :

20 OECD
countries and 29
non-OECD
countries
1980 - 1995

OLS

FDI alone has an ambiguous affect on economic growth. However, the countries which have developed
financial markets can benefit from FDI.

Reisen & Soto
__________(2001)__________

44 countries
1986 - 1997

GMM

FDI and portfolio investments affect economic growth positively.

Obwona
__________(2001)__________

Uganda
1975 - 1991

2 Stage Least
______Squares______

FDI has a positive effect on economic growth in Uganda.

Berthelemy & Demurger
__________(2000)__________

24 Chinese
provinces
1985 - 1996

GMM

FDI plays an important role in the economic growth of Chinese provinces.

De Mello
(1999)

32 OECD and
non-OECD
countries
1970 - 1990

Augmented
Dickey-Fuller,
Panel
Cointegration,OLS

There is an inverse relationship between the difference of technologically leader countries and their
followers, and effect of FDI on economic growth.

Nair — Reichert &
Weinhold
(1999)

24 developing
countries
1971 - 1995

MFR model
(mixed fixed and
random model)
Causality Test

Although there is heterogeneity between countries, the affect of FDI on future economic growth rates is
more in more open countries.

Balasubramanyam, Salisu
& Sapsford

46 countries

OLS

___________________FDI - labor force relations play an important role in the growth process.___________________