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

__________(1999)__________

1970 - 1985

Borensztein, Gregorio &
Lee
__________(1998)__________

69 developing
countries
1979 - 1989

SUR Method

FDI is an important tool for technology transfer. Also, it makes more contributions to economic growth than
domestic investment.

Balasubramanyam, Salisu
& Sapsfort
__________(1996)__________

46 developing
countries
1970 - 1985

OLS

In export promoting countries affect of FDI on economic growth is more than import - substituting
____________________________________________________countries._____________________________________________________

Fry
(1993)

16 developing
countries

1975 - 1991
(different time
periods according
to different
______countries)______

OLS

In 11 developing countries, FDI affects economic growth negatively. But in Pacific Basin countries FDI
affects economic growth positively. The reason of these different evidences is that, in Pacific Basin
countries economic distortions are less.

Bornschier, Chase-Dunn
& Rubinson
__________(1978)__________

76 less developed
countries
1960 - 1975

OLS

FDI has negative impact on economic growth in developing countries. Also, this impact increases as income
__________________________________________________level increases.__________________________________________________

Papanek
(1973)

1. Sample:

34 countries

1950s

2. Sample:

51 countries

1960s

OLS

Savings and FDI flows affect one third of economic growth; foreign aids have more impact than other
determinants on economic growth. There is no obvious relationship between FDI and foreign aids. Also,
economic growth is not correlated with export, education, per capita income and country size.

Causality Analysis

Hansen & Rand
(2006)

31 developing
countries
1970 - 2000

Unit Root Tests,
Panel
Cointegration Test
and VAR Analysis

There is a strong causality from FDI through GDP growth.

Chowdhury &Mavrotas
__________(2006)__________

3 countries
1969 - 2000

Toda - Yamamoto
Causality Test

In Chile, GDP growth is the Granger Cause of FDI but reverse is not true. In Malaysia and Thailand FDI and
___________________________economic growth are Granger causes of each other.____________________________

Hsiao & Hsiao

8 countries

Granger Causality
Test and VAR

There is one - way causality from FDI through GDP growth and exports. FDI and exports make positive