k~* = ~f(k~*)+~r(k~-k~*)-n~k~-c~-FDI
(B.5)
~~~~
Given that ~ = f ( k '), the growth rate of output is ~~ = — ---
f(k*) k
. Again,
f '( F) ~
f ( ~')
is
share of capital income in total income in the foreign country. Substituting respective value of
from (C.5), we may express growth rate of output as
_f'(~∙)~ Γf(k')
~f(k~*)
k~'
+ ~r
( k - k)
k *
— n
k~'
k~'
FDI
(B.6)
Hence, the growth rate of foreign economy is positively supported by returns out of sum of claims
"∖~ "∖~
∂g ~— ∂g ~—
and negatively by FDI, that is, —~—~— > 0 and-----< 0.
∂(k -k ') ∂FDI
21
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