外文翻译原文--浅析外国直接投资与经济增长关系
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本科毕业论文外文翻译外文题目:How does foreign direct investment affect economic growth 出处:Journal of International Economics 45(1998) 115-135作者: E.Borensztein,J.De Gregorio,J-W.LeeHow does foreign direct investment affect economicgrowth?AbstractWe test the effect of foreign direct investment (FDI) on economic growth in a cross-country regression framework, utilizing data on FDI flows from industrial countries to 69 developing countries over the last two decades. Our results suggest that FDI is an important vehicle for the transfer of technology, contributing relatively more to growth than domestic investment. However, the higher productivity of FDI holds only when the host country has a minimum threshold stock of human capital. Thus, FDI contributes to economic growth only when a sufficient absorptive capability of the advanced technologies is available in the host economy.一、IntroductionTechnology diffusion plays a central role in the process of economic development. In contrast to the traditional growth framework, where technological change was left as an unexplained residual, the recent growth literature has highlighted the dependence of growth rates on the state of domestic technology relative to that of the rest of the world. Thus, growth rates in developing countries are, in part, explained by a ‘catch-up’ process in the level of technology. In a typical model of technology diffusion, the rate of economic growth of a backward countrydepends on the extent of adoption and implementation of new technologies that are already in use in leading countries.Technology diffusion can take place through a variety of channels that involve the transmission of ideas and new technologies. Imports of high-technology products, adoption of foreign technology and acquisition of human capital through various means are certainly important conduits for the international diffusion of technology. Besides these channels, foreign direct investment by multinational corporations (MNCs) is considered to be a major channel for the access to advanced technologies by developing countries. MNCs are among the most technologically advanced firms, accounting for a substantial part of the world’s research and development (R and D) investment. Some recent work on economic growth has highlighted the role of foreign direct investment in the technological progress of developing countries. Findlay (1978) postulates that foreign direct investment increases the rate of technical progress in the host country through a ‘contagion’ effect from the more advanced technology, management practices, etc. used by the foreign firms.Wang (1990) incorporates this idea into a model more in line with the neoclassical growth framework, by assuming that the increase in ‘knowledge’ applied to production is determined as a function of foreign direct investment (FDI).The purpose of this paper is to examine empirically the role of FDI in the process of technology diffusion and economic growth in developing countries.We motivate the empirical work by a model of endogenous growth, in which the rate of technological progress is the main determinant of the long-term growth rate of income. Technological progress takes place through a process of ‘capital deepening’in the form of the introduction of new varieties of capital goods. MNCs possess more advanced ‘knowledge’, which allows them to introduce new capital goods at lower cost. However, the application of this more advanced technologies also requires the presence of a sufficient level of human capital in the host economy. The stock of human capital in the host country, therefore, limits the absorptive capability of a developing country, as in Nelson and Phelps (1966), and Benhabib and Spiegel (1994). Hence, the model highlights the roles of both the introduction of more advanced technology and the requirement of absorptive capability in the host country asdeterminants of economic growth, and suggests the empirical investigation of the complementarity between FDI and human capital in the process of productivity growth.We test the effect of FDI on economic growth in a framework of cross-country regressions utilizing data on FDI flows from industrial countries to 69 developing countries over the last two decades. Our results suggest that FDI is in fact an important vehicle for the transfer of technology, contributing to growth in larger measure than domestic investment. Moreover, we find that there is a strong complementary effect between FDI and human capital, that is, the contribution of FDI to economic growth is enhanced by its interaction with the level of human capital in the host country. However, our empirical results imply that FDI is more productive than domestic investment only when the host country has a minimum threshold stock of human capital. The results are robust to a number of alternative specifications, which control for the variables usually identified as the main determinants of economic growth in cross-country regressions. This sensitivity analysis along the lines of Levine and Renelt (1992) shows a robust relationship between economic growth, FDI and human capital.We also investigate the effect of FDI on domestic investment, namely, whether there is evidence that the inflow of foreign capital ‘crowds out’ domestic investment. In principle, this effect could have either sign: by competing in product and financial markets MNCs may displace domestic firms; conversely, FDI may support the expansion of domestic firms by complementarity in production or by increasing productivity through the spillover of advanced technology. Our results are supportive of a crowding-in effect, that is, a one-dollar increase in the net inflow of FDI is associated with an increase in total investment in the host economy of more than one dollar, but do not appear to be very robust.Thus, it appears that the main channel through which FDI contributes to economic growth is by stimulating technological progress, rather than by increasing total capital accumulation in the host economy.二、DataThere are several sources for data on foreign direct investment. Two IMF publications provide data on net and gross foreign direct investment (International Financial Statistics, and Balance of Payments Statistics, respectively). Net FDI refers to inflows net of outflows, and gross FDI refers only to inflows, that is, foreign direct investment into the country. An OECD publication (Geographical Distribution of Financial Flows to Developing Countries) tallies gross FDI originated in OECD member countries into developing economies. The choice between these alternatives depends on which data set would correspond more closely to the FDI effect we are trying to uncover.In the first place, it seems more appropriate to use gross data because we are interested in the effects of foreign direct investment in the host country via transfer of knowledge and other spillover effects; in addition, we would not expect the outflow of foreign direct investment to involve a similar negative growth effects for the source country (loss of knowledge). In the second place, in our framework, foreign direct investment flows from industrialized to developing countries to close the technological gap. Foreign direct investment taking place between countries with roughly the same level of technological development may respond to a large extent to other factors, including global firm strategy and market penetration, or to allow firms to circumvent trade restrictions and offset other advantages accorded to domestic producers. This type of foreign direct investment flows may not be expected to display higher than average productivity. For this reason we focus only on foreign direct investment received by developing countries. And furthermore, since flows of foreign direct investment between developing countries may also respond to factors other than the technological gap, we also exclude those flows.Therefore, the OECD measure of foreign direct investment, while having a partial coverage, appears to be the most appropriate for our purposes. These data are available on a yearly basis from 1970. National accounts data, such as the growth rate of income, initial income and government consumption, are all taken from Summers and Heston (release 5.5 of June 1993) which provides data up to 1989. This allows us to consider a 20-year period for the empirical investigation. The growth rate measureis the average annual rate of per capita real GDP over each decade, 1970–79 and 1980–89. Government consumption is measured by the average share of real government consumption in real GDP.For the human capital stock variable we use the initial-year level of average years of the male secondary schooling constructed by Barro and Lee (1993). According to Barro and Lee (1994), this measure of educational attainment is the one most significantly correlated with growth. Data for the other explanatory variables, such as the domestic investment rate, the foreign exchange parallel market premium and the measures of political instability and financial development are also taken from Barro and Lee (1994).三、ConclusionsThere is a good a priori case to presume that FDI is more productive than domestic investment. As Graham and Krugman (1991) argue, domestic firms have better knowledge and access to domestic markets; if a foreign firm decides to enter the market, it must compensate for the advantages enjoyed by domestic firms. It is most likely that a foreign firm that decides to invest in another country enjoyslower costs and higher productive efficiency than its domestic competitors. In the case of developing countries in particular, it is likely that the higher efficiency ofFDI would result from a combination of advanced management skills and more modern technology; FDI may be the main channel through which advanced technology is transferred to developing countries.Different types of economic distortions, however, may jeopardize the role of FDI as a means for advanced technology transfer. For example, because of protectionist trade policies, FDI may be the only way to gain access to domestic markets by firms that would otherwise have been exporters to the host country. Similarly, governments may offer a set of incentives to foreign investors to stimulate the inflow of FDI, with the objective of increasing foreign exchange reserves or of developing certain sectors considered strategic from an industrialpolicy viewpoint. These policies may result in a flow of FDI that does not respondto higher efficiency but only to profit opportunities created by distorted incentives. These considerations make the empirical evaluation of the performance of FDI an appealing question. We investigated these issues in a sample that comprises FDI flows from industrial country into developing countriesThe most robust finding of this paper is that the effect of FDI on economic growth is dependent on the level of human capital available in the host economy. There is a strong positive interaction between FDI and the level of educational attainment (our proxy for human capital). Notably, the same interaction is not significant in the case of domestic investment, possibly a reflection of differences of technological nature between FDI and domestic investment. We also found some evidence of a crowding-in effect, namely that FDI is complementary to domestic investment. This effect, however, seems to be less robust than our other findings.Some caution must be exercised, however, in the interpretation of the size of the effect on economic growth of FDI. Our data measures the international flow of resources for foreign direct investment, as recorded in balance of payments statistics. This is, however, only part of the resources invested by a multinational firm, because some part of the investment may be financed through debt or equity issues raised in the domestic market. Thus, our measure of FDI underestimates the total value of fixed investment made by a multinational firm and the coefficients on FDI may be proportionally overestimated. To the extent that this bias in the measure of FDI is uniform across countries and over time, the qualitative results are not affected.Finally, the results of this paper suggest some directions for further research. The results suggest that the beneficial effects on growth of FDI come through higher efficiency rather than simply from higher capital accumulation. This suggests the possibility of testing the effect of FDI on the rate of total factor productivity growth in recipient countries. In addition, given the robustness of the effect of interactions between human capital and FDI, it might be interesting to explore the effects of FDI on the level of human capital. As we have argued above, FDI is a vehicle for the adoption of new technologies, and therefore, the training required to prepare the labour force to work with new technologies suggests that there may also be an effect有几个外商直接投资的数据来源,国际货币基金组织出版物提供两个净外国直接投资和总(分别是国际金融统计和国际收支平衡统计)的数据。
外商直接投资对经济增长的影响分析随着全球化的深入发展,外商直接投资(Foreign Direct Investment, FDI)在许多国家的经济中扮演着越来越重要的角色。
外商直接投资对经济增长产生着广泛而深远的影响,能够促进资源优化配置、技术创新、产业升级以及就业增加。
首先,外商直接投资可以促进资源优化配置。
外商直接投资带来的国外资本对于投资国的发展起到了积极的推动作用。
投资国通常面临着资本不足或技术落后的局面,在这种情况下,外商直接投资的流入为其提供了良好的机会。
外资的引入能够填补资本缺口,扩大投资规模,提高产能和效率。
同时,外商直接投资可以通过引进先进的生产技术和管理经验,推动投资国产业结构的优化和转型升级。
在全球价值链的背景下,外商直接投资的引入还可以带来更多的中小企业发展机会,促进企业间及产业链上的资源配置优化,提高整体效益。
其次,外商直接投资对于技术创新的推动作用不容忽视。
外商直接投资的主要特点之一是直接引进了外国先进的技术、管理经验和市场知识。
外国直接投资者通常会带来一系列的技术嫁接,通过与本国企业的合作或者在本土设立研发中心,推动了投资国的技术创新。
这种技术溢出效应能够带动整个产业的技术进步,提高产品质量和生产效率。
特别是在高新技术产业和制造业中,外商直接投资对于技术创新的贡献更为明显。
外资的引入使得投资国能够借鉴国外先进的技术标准和管理模式,推动技术升级和创新能力的提升。
此外,外商直接投资还可以促进就业增加。
外商直接投资的引入创造了大量的就业机会。
投资国因为外资的引入,吸引了更多的投资项目和外商企业,从而刺激了产业的发展和就业的增长。
特别是在劳动密集型产业中,外商直接投资对于就业的拉动效应更为显著。
这对于发展中国家来说尤为重要,能够有效减少就业压力,促进人口的就业和收入水平的提高,带动消费和内需的增长。
同时,外商直接投资还能提供技能培训和职业发展机会,提高就业者的技能水平和就业质量。
了解外国直接投资(FDI)外文翻译外文翻译原文Understanding Foreign Direct Investment FDIMaterial Source: ////0>._foreign_direct_investment.htm Author: Jeffrey P. Graham and R. Barry SpauldingForeign direct investment FDI plays an extraordinary and growing role in global business. It can provide a firm with new markets and marketing channels, cheaper production facilities, access to new technology, products, skills and financing. For a host country or the foreign firm which receives the investment, it can provide a source of new technologies, capital, processes, products, organizational technologies and management skills, and as such can provide a strong impetus to economic development. Foreign direct investment, in its classic definition, is defined as a company from one country making a physical investment into building a factory in another country. The direct investment in buildings, machinery and equipment is in contrast with making a portfolio investment, which is considered an indirect investment. In recent years, given rapid growth and change in global investmentpatterns, the definition has been broadened to include the acquisition of a lasting management interest in a company or enterprise outside the investing firm’s home country. A s such, it may take many forms, such as a direct acquisition of a foreign firm, construction of a facility, or investment in a joint venture or strategic alliance with a local firm with attendant input of technology, licensing of intellectual property, in the past decade, FDI has come to play a major role in the internationalization of business. Reacting to changes in technology, growing liberalization of the national regulatory framework governing investment in enterprises, and changes in capital markets profound changes have occurred in the size, scope and methods of FDI. New information technology systems, decline in global communication costs have made management of foreign investments far easier than in the past. The sea change in trade and investment policies and the regulatory environment globally in the past decade, including trade policy and tariff liberalization, easing of restrictions on foreign investment and acquisition in many nations, and the deregulation and privation of many industries, has probably been the most significant catalyst for FDI’ s expanded role ? The most profound effect has been seen in developing countries, where yearly foreign direct investment flows have increased from an average of less than $10 billion in the 1970’s to a yearly average of less than $20 billion in the 1980’s, to explode in the 1990s from $26.7billion in 1990 to $179 billion in 1998and $208 billion in 1999 and now comprise a large portion of global FDI Driven by mergers and acquisitions and internationalization of production in a range of industries, FDI into developed countries last year rose to $636 billion, from $481 billion in 1998 Source: UNCTADProponents of foreign investment point out that the exchange of investment flows benefits both the home country the country from which the investment originates and the host country the destination of the investment. Opponents of FDI note that multinational conglomerates are able to wield great power over smaller and weaker economies and can drive out much local competition. The truth lies somewhere in the middle.For small and medium sized companies, FDI represents an opportunity to become more actively involved in international business activities. In the past 15 years, the classic definition of FDI as noted above has changed considerably. This notion of a change in the classic definition, however, must be kept in the proper context. Very clearly, over 2/3 of direct foreign investment is still made in the form of fixtures, machinery, equipment and buildings. Moreover, larger multinational corporations and conglomerates still make the overwhelming percentage of FDI. But, with the advent of the Internet, the increasing role of technology, loosening of direct investment restrictions in many markets and decreasing communication costs means that newer, non-traditional forms of investment will play an important role in the future. Manygovernments, especially in industrialized and developed nations, pay very close attention to foreign direct investment because the investment flows into and out of their economies can and does have a significant impact. In the United States, the Bureau of Economic Analysis, a section of the U.S. Department of Commerce, is responsible for collecting economic data about the economy including information about foreign direct investment flowsMonitoring this data is very helpful in trying to determine the impact of such investments on the overall economy, but is especially helpful in evaluating industry segments. State and local governments watch closely because they want to track their foreign investment attraction programs for successful outcomes.How Has FDI Changed in the Past Decade As mentioned above, the overwhelming majority of foreign direct investment is made in the form of fixtures, machinery, equipment and buildings. This investment is achieved or accomplished mostly via mergers & acquisitions. In the case of traditional manufacturing, this has been the primary mechanism for investment and it has been heretofore very efficient. Within the past decade, however, there has been a dramatic increase in the number of technology startups and this, together with the rise in prominence of Internet usage, has fostered increasing changes in foreign investment patterns. Many of these high tech startups are very small companies that have grown out of research & development projects often affiliated withmajor universities and with some government sponsorship. Unlike traditional manufacturers, many of these companies do not require huge manufacturing plants and immense warehouses to store inventory. Another factor to consider is the number of companies whose primary product is an intellectual property right such as a software program or a software-based technology or process. Companies such as these can be housed almost anywhere and therefore making a capital investment in them does not require huge outlays for fixtures, machinery and plants.In many cases, large companies still play a dominant role in investment activities in small, high tech oriented companies. However, unlike in the past, these larger companies are not necessarily acquiring smaller companies outright. There are several reasons for this, but the most important one is most likely the risk associated with such high tech ventures. In the case of mature industries, the products are well defined. The manufacturer usually wants to get closer to its foreign market or wants to circumvent some trade barrier by making a direct foreign investment. The major risk here is that you do not sell enough of the product that you manufactured. However, you have added additional capacity and in the case of multinational corporations this capacity can be used in a variety of waysHigh tech ventures tend to have longer incubation periods. That is, the product tends to require significant development time. In the caseof software and other intellectual property type products, the product is constantly changing even before it hits the marketplace. This makes the investment decision more complicated. When you invest in fixtures and machinery, you know what the real and book value of your investment will be. When you invest in a high tech venture, there is always an element of uncertainty. Unfortunately, the recent spate of dot failures is quite illustrative of this point.Therefore, the expanded role of technology and intellectual property has changed the foreign direct investment playing field. Companies are still motivated to make foreign investments, but because of the vagaries of technology investments, they are now finding new vehicles to accomplish their goals. Consider the following: Licensing and technology transfer. Licensing and tech transfer have been essential in promoting collaboration between the academic and business communities. Ever since legal hurdles were removed that allowed universities to hold title to research and development done in their labs, licensing agreements have helped turned raw technology into finished products that are viable in competitive marketplaces. With some help from a variety of government agencies in the form of grants for R&D as well as other financial assistance for such things as incubator programs, once timid college researchers are now stepping out and becoming cutting edge entrepreneurs. These strategic alliances have had a serious impact inseveral high tech industries, including but not limited to: medical and agricultural biotechnology, computer software engineering, telecommunications, advanced materials processing, ceramics, thin materials processing, photonics, digital multimedia production and publishing, optics and imaging and robotics and automation. Industry clusters are now growing up around the university labs where their derivative technologies were first discovered and nurtured. Licensing agreements allow companies to take full advantage of new and exciting technologies while limiting their overall risk to royalty payments until a particular technology is fully developed and thus ready to put new products into the manufacturing pipeline Reciprocal distribution agreements: Actually, this type of strategic alliance is more trade-based, but in a very real sense it does in fact represent a type of direct investment. Basically, two companies, usually within the same or affiliated industries, agree to act as a national distributor for each other’s products. The classical example is to be found in the furniture industry. A U.S.-based manufacturer of tables signs a reciprocal distribution agreement with a Spanish-based manufacturer of chairs. Both companies gain direct access to the other’s distribution network without having to pay distributor support payments and other related expenses found within the distribution channel and neither company can hurt the other’s market for its products. With out such an agreement in place, theSpanish manufacturer might very well have to invest in a national sales office to coordinate its distributor network, manage warehousing, inventory and shipping as well as to handle administrative tasks such as accounting, public relations and advertising.Joint venture and other hybrid strategic alliances: The more traditional joint venture is bi-lateral, that is it involves two parties who are within the same industry who are partnering for some strategic advantage. Typical reasons might include a need for access to proprietary technology that might tip the competitive edge in another competitor’s favor, desire to gain access to intellectual capital in the form of ultra-expensive human resources, access to heretofore closed channels of distribution in key regions of the world. One very good reason why many joint ventures only involve two parties is the difficulty in integrating different corporate cultures. With two domestic companies from the same country, it would still be very difficult. However, with two companies from different cultures, it is almost impossible at times. This is probably why pure joint ventures have a fairly high failure rate only five years after inception. Joint ventures involving three or more parties are usually called syndicates and are most often formed for specific projects such as large construction or public works projects that might involve a wide variety of expertise and resources for successful completion. In some cases, syndicates are actually easier to manage because the projectitself sets certain limits on each party and close cooperation is not always a prerequisite for ultimate success of the endeav 译文了解外国直接投资FDI资料来源: ////. _direct_investment.htm作者:Jeffrey P. Graham and R. Barry Spaulding外商直接投资(FDI)在全球经济活动中发挥着特殊的作用,它的作用也越来越大。
经济增长与外商直接投资的关系近年来,随着全球化的深入发展,外商直接投资(Foreign Direct Investment,FDI)在世界各国的经济增长中起到了举足轻重的作用。
本文将探讨经济增长与外商直接投资之间的关系,以及外商直接投资对国家经济发展的积极影响。
首先,外商直接投资极大地促进了国家的经济增长。
通过外商直接投资,大量外国资本迅速流入目标国家,为该国经济的发展提供了充分的资金来源。
这些资金可以用于建设基础设施、促进产业升级以及推动创新和技术进步。
特别是对于一些发展中国家来说,外商直接投资具有巨大的吸引力,可以弥补其经济建设中的不足,帮助其摆脱贫困陷阱。
例如,中国自改革开放以来,吸引了大量外国投资,这些资金不仅填补了中国发展初期的资金缺口,还推动了中国经济的快速增长。
其次,外商直接投资对于促进技术创新和转移起到了重要的推动作用。
外国企业通常带来了先进的生产技术和管理经验,与本地企业合作可以促进技术创新和知识流动。
这对于目标国家来说,尤其是发展中国家,能够提高本国产业的技术水平,加快产业升级的步伐。
例如,许多跨国汽车企业在中国建设研发中心,推动了中国汽车产业的快速发展,提高了中国汽车产品的品质和技术含量。
此外,外商直接投资还对目标国家的就业和贸易产生积极影响。
外国企业的设立和扩展通常伴随着大量的工作岗位的创造,提供了更多的就业机会,降低了失业率。
同时,外商直接投资也为目标国家带来了更多的贸易机会。
外国企业进入目标国家市场,带来了新的产品和服务,扩大了目标国家的出口,在国际贸易中起到了推动作用。
例如,中国成为全球最大的外商直接投资目的国之一后,其贸易规模显著扩大,对世界贸易的增长做出了巨大贡献。
当然,外商直接投资在一些情况下也可能带来一些负面影响,例如环境污染和资源浪费等问题。
然而,通过制定合理的政策和管理措施,可以最大程度地减少这些负面影响,并确保外商直接投资对国家经济增长的正面作用得以发挥。
外商直接投资与经济增长的关系随着全球化的加剧和市场化的推进,外商直接投资已成为国际经济合作中一个重要的方面。
外商直接投资不仅可以促进技术进步和贸易往来,而且可以为经济的发展带来巨大的效益。
那么,外商直接投资到底与经济增长有什么关系呢?本文将对这一问题进行探讨。
一、外商直接投资的概念外商直接投资(Foreign Direct Investment,简称FDI),指的是一个国家或地区的居民通过在另一个国家或地区购买股份、设立投资性企业等形式投资,从而获得在该国或该地区的经济利益和控制权的活动。
外商直接投资的形式主要有两种:一种是绿地直接投资,即在国外直接投资设立新的企业或建设新的工厂等;另一种是收购直接投资,即购买外国已有的企业或资产。
在全球化和市场化的背景下,外商直接投资已经成为各国之间经济交流与合作的重要方式。
越来越多的外资涌入到各国市场中,为世界经济发展注入了新的动力,而其中最重要的就是外商直接投资。
二、外商直接投资对于一个国家的经济增长具有至关重要的作用。
研究表明,外商直接投资可以带来以下几个方面的经济效益。
首先,外商直接投资可以带来技术进步和创新。
外国投资者通常会带来更加先进的技术和经验,使本国企业的生产效率和管理水平得到提高。
此外,外商直接投资还可以促进技术创新和产业升级,造福于整个经济体系。
其次,外商直接投资可以改善国家的投资环境。
外国投资者要进入一个国家,就需要对该国的投资环境进行评估。
如果该国的投资环境好,外国投资者就会更容易的入驻该国,并在该国长期投资。
国家也会为了吸引外商直接投资而提高投资环境,从而推动整个投资的发展。
再次,外商直接投资可以刺激出口和内需。
外国投资者不仅可以为该国的出口创造市场,而且还可以促进该国的内需,从而提高该国的商品消费和服务消费的质量。
最后,外商直接投资可以刺激就业和经济增长。
外国投资者在创办企业时,往往会聘用当地员工,从而带动经济的就业和发展。
三、外商直接投资对于发展中国家的影响在中国的改革开放过程当中,外商直接投资发挥着至关重要的作用。
外国直接投资与经济增长外国直接投资(Foreign Direct Investment,FDI)与经济增长一直是国际经济研究的重要课题之一。
FDI是指一个国家的居民或企业通过在另一个国家投资开办子公司、购买股份或进行其他投资形式,以获得对被投资国家企业的管理权或控制权。
这种投资模式在全球化时代得到了迅速发展,对经济增长产生着重要影响。
首先,外国直接投资对经济增长的影响主要体现在技术引进和创新方面。
通过FDI,外国企业可以将先进的生产技术、管理经验和市场营销策略引入到被投资国家,从而提高了整体生产效率和竞争力。
这种技术溢出效应可以促进被投资国家的产业升级和结构调整,推动经济增长。
同时,外国直接投资还可以刺激本地企业进行技术创新,提高其综合竞争力。
其次,外国直接投资也可以促进就业和劳动生产率的提升。
作为一种资本流动方式,FDI不仅带来了资金的注入,还创造了大量就业机会。
外国直接投资往往需要在被投资国建设生产基地或办公机构,从而为当地居民提供了更多的就业机会。
此外,外资的引入还促进了劳动力的培训和技能的提升,提高了劳动生产率。
第三,外国直接投资对于贸易和市场开放的促进也对经济增长产生了积极的影响。
外国直接投资进一步促进了国际贸易的发展,扩大了出口和进口的规模。
通过设立生产基地或购买本地企业,在当地市场销售产品或提供服务,外国直接投资可以帮助企业拓展全球市场,并实现经济规模效益。
同时,外国直接投资也推动了被投资国家的市场开放和外国企业参与度的提高,加速了国内市场的竞争与优化。
然而,外国直接投资也可能带来一些潜在的风险和问题。
首先,FDI可能导致资源的外流和利润的外溢。
一些外国企业通过FDI获取了被投资国家的资源,但利润却主要流向了总部所在国。
这可能导致被投资国家对资源的过度依赖,而忽视了本国产业的发展。
此外,外国直接投资也可能导致环境污染、资源浪费等问题,需要加强监管和约束措施。
总的来说,外国直接投资对经济增长具有积极而重要的影响。
经济发展与外商直接投资的关系经济发展是每个国家都追求的目标,而外商直接投资(Foreign Direct Investment,简称FDI)作为一种重要的国际资本流动形式,对于促进经济发展起着不可忽视的作用。
从长远的角度来看,外商直接投资不仅为国家带来了资金和技术,还促进了产业结构升级、就业机会增加以及贸易发展。
本文将重点探讨经济发展与外商直接投资之间的关系,并分析其中的内在机制。
一、外商直接投资对经济发展的促进作用1. 资金和技术输入外商直接投资为国家带来了大量的资金和技术资源。
在发展中国家和地区,那些相对不发达或技术落后的产业得以通过外资的注入迅速改善。
外商直接投资通常是雇佣当地劳动力,提供先进的技术和管理经验,推动国家产业升级,提高生产效率。
资金和技术的输入有助于改善生产和生活条件,促进经济发展。
2. 产业结构升级外商直接投资有助于促进国家产业结构的升级。
外资企业往往选择在投资对象国家的高附加值、高技术领域进行投资,从而推动国家产业的升级和转型。
这种结构性转变不仅使国家的产业更加具有竞争力,还提高了国家经济的整体效益。
3. 就业机会增加外商直接投资的流入为当地创造了大量就业机会。
外资企业通常需要雇佣当地员工来进行生产和管理,这不仅提高了就业率,减少了贫困,还为当地人提供了更好的收入来源和发展机会。
就业机会的增加有助于改善居民生活水平,进一步推动经济的可持续发展。
4. 贸易发展外商直接投资的流入促进了国际贸易的发展。
外资企业通常会与当地企业进行合作,形成生产链、供应链,增加了国际贸易的规模和范围。
外商直接投资使国家能够更好地融入全球产业链,扩大出口,提高产品质量和竞争力,从而带动经济的发展。
二、外商直接投资与经济发展的内在机制1. 促进资源有效配置外商直接投资能够促进资源的有效配置。
由于外资企业具有较高的技术和管理水平,能够在资源配置方面发挥重要作用。
外商直接投资的流入能够引导和优化资源配置,提高资源利用效率,从而推动经济发展。
外商直接投资与经济增长的关联分析一、引言外商直接投资(Foreign Direct Investment, FDI)是一个国家经济发展的重要组成部分。
在全球化不断推进的今天,越来越多的国家都意识到外商直接投资对经济增长的重要性。
本文将探讨外商直接投资与经济增长之间的关联,并分析其对一个国家的经济发展产生的影响。
二、外商直接投资对经济增长的贡献外商直接投资对一个国家的经济增长有着积极的影响。
首先,外商直接投资可以促进资本和技术的引进。
外国企业通过投资,不仅带来了大量的资金,也将先进的生产技术和管理经验引入,从而提升了国内企业的竞争力和效率。
其次,外商直接投资可以创造就业机会。
外资企业的设立和扩大会带来更多的工作岗位,降低了国家的失业率,增加了居民的收入,促进了消费和投资的增长。
最后,外商直接投资还可以加快产业结构的升级和调整。
外国投资者通常更加注重高附加值和技术密集的行业,通过引进新的产业和新的产品,可以推动国家整体经济结构的升级。
然而,外商直接投资的贡献也面临着一些挑战和问题。
首先,一些国家可能过分依赖于外商直接投资而忽视了本国产业的发展,造成了产业结构单一和对外依赖性过高的问题。
过度依赖外资也可能导致国内企业的竞争力和创新能力的下降。
其次,外商直接投资还存在着一些风险,如资本外流、技术泄漏和环境污染等问题。
因此,政府在引导外商直接投资时需要制定相应的政策和规范,确保投资的可持续性和对国家经济的正面影响。
三、外商直接投资的影响因素外商直接投资的规模和影响力受到多种因素的影响。
首先,一个国家的政治稳定性和法治环境是吸引外商直接投资的重要因素。
外国投资者在选择投资目标时,会考虑政治风险和法律环境的稳定程度。
其次,一个国家的市场规模、人力资源和基础设施建设情况也会对外商直接投资起到重要的影响。
市场规模大、人力资源丰富以及基础设施完善的国家更容易吸引外国投资者。
同时,一个国家的贸易政策和税收政策也会对外商直接投资起到重要的促进作用。
外国直接投资与经济发展随着全球化的进程不断加快,外国直接投资(Foreign Direct Investment,简称FDI)在各国的经济中扮演着越来越重要的角色。
外国直接投资是指一国企事业单位或个人对其他国家企事业单位的资本投入,通过购买股权、参与经营等方式,建立起跨国经济联系。
这种投资形式对于发展中国家尤其重要,能够带动经济发展、增加就业、改善技术水平等。
本文将探讨外国直接投资与经济发展之间的关系,并分析其优势和挑战。
一、外国直接投资对经济发展的积极影响1. 促进经济增长:外国直接投资的到来为国家带来了资本、技术和管理经验的注入,可以推动国内企业的发展和壮大,进而促进经济的增长。
跨国公司带来的资本和技术可以填补国内企业的短板,提高生产效率,推动产业升级,从而刺激经济的发展。
2. 创造就业机会:外国直接投资的流入可以为国家创造大量的就业机会,降低失业率,改善人民生活水平。
跨国公司常常会在投资国建厂,招募当地员工,提供就业机会,这有助于减少国内的就业压力,提高人民的收入水平。
3. 吸引其他投资:外国直接投资的到来可以为国家树立良好的投资环境和国际形象,吸引其他国家的投资。
当一个国家能够吸引外国投资者的目光,其他投资者也会看到这个国家的潜力,纷纷加大对该国的投资力度,进一步推动经济发展。
二、外国直接投资带来的挑战和应对之策1. 技术和知识转移:尽管外国直接投资可以带来技术和知识的转移,但在某些情况下,投资国可能会面临技术依赖的问题。
为此,投资国需要加强本国企业的自主创新能力,加大研发投入,提高技术产业化水平,以保持竞争力。
2. 经济依赖和风险:外国直接投资可能会导致国家对外国企业过于依赖,一旦外国投资撤离或转移,就会给投资国带来经济风险。
为此,投资国应制定合适的政策,吸引更多外国直接投资,同时鼓励本国企业多元化发展,降低对外国直接投资的依赖程度。
3. 社会和环境影响:外国直接投资可能会对投资国的社会和环境产生一定的影响。
市场环境下的外商直接投资与经济增长的关联外商直接投资(Foreign Direct Investment, FDI)是指跨国公司或个人购买或建立在境外的生产设施、购买股权等直接投资行为。
随着经济全球化的进程不断加快,外商直接投资对国家和地区的经济发展起着越来越重要的作用。
本文将探讨市场环境下外商直接投资与经济增长之间的关联。
一、外商直接投资促进经济增长的理论基础外商直接投资对经济增长的促进作用可以从多个角度进行解释。
首先,外商直接投资对技术进步的传播有积极作用。
外国企业将先进技术和管理经验引进到本地,这有助于提高国内企业的技术水平和竞争力。
其次,外商直接投资带来的资本投入可以解决资金短缺问题,推动生产力的提升和产出的增加。
此外,外国投资者还会引入新的市场信息和管理模式,提高市场效率,促进资源优化配置。
因此,外商直接投资在为国家和地区带来资金、技术和管理方面具有独特的优势。
二、市场环境下外商直接投资的挑战然而,市场环境对外商直接投资的影响也不可忽视。
市场环境包括经济、政治、法律等多个方面的因素,对外商直接投资的吸引力和效果有着重要影响。
首先,市场规模和潜在消费需求是外商直接投资的重要考量因素。
较大的市场规模和潜在消费需求会吸引更多的外商直接投资,从而推动经济增长。
其次,对外商直接投资的监管和法律环境对投资者的决策起着关键作用。
较为稳定和透明的法律环境有利于投资者保护权益和降低投资风险。
此外,政府的政策支持和鼓励措施也是吸引外商直接投资的因素之一。
因此,在市场环境下,国家和地区需要加大力度改善市场环境,提升吸引外商直接投资的能力。
三、外商直接投资与经济增长的案例分析为了更好地理解市场环境下外商直接投资与经济增长的关联,进一步分析一些国家和地区的案例可以提供有益启示。
例如,中国自改革开放以来持续鼓励外商直接投资,并在市场开放、政策支持等方面做出了一系列的改革举措。
这些措施有效吸引了大量外国投资者,推动中国经济快速增长,并且取得了显著的成果。
外文翻译原文--浅析外国直接投资与经济增长关系Applied Economics 2009 41 1621–1641An analysis of the relationshipbetween foreign direct investmentand economic growthJonathan A Battena and Xuan Vinh VobaGraduate School of Management Macquarie University Sydney NSW Australia Department of Finance Hong Kong University of Science Technology Kowloon Hong KongbDepartment of Economics University of NSW Sydney Australia Employing a panel data modelling technique we contribute to twocriticalresearch issues what is the link between Foreign Direct Investment FDIand economic growth and does the relationship change under differenteducational institutional and economic conditions Overall the analysissupports the view that FDI has a stronger positive impact on economicgrowth in countries with a higher level of education attainment opennessto international trade and stock market development and a lower rate ofpopulation growth and lower level of risk Thus countries undertakingreform of cross-border capital restrictions and controls andinitiating otherpolicy aimed at encouraging FDI need to ensure that broader socialpolicyobjectives – such as education and institutionalreform – are alsoundertaken to leverage the benefits from FDII Introduction While some policy makers may remain circumspectabout the long-term benefits arising from inwardWorldwide the development of deeper and moreor inbound portfolio investment often citing thesophisticated domestic and international financialdangers to domestic financial system stability arisingmarkets improvements in technology and informa- from its speculative component FDI by virtue of itstion transmission have contributed to enhanced longer term nature is regarded more favourablyeconomic and financial integration To capture Academic investigation of the economic impact frommany of the economic benefits arising from theseFDI flows also generally support the view of positiveprocesses many countries –especially developing economic benefits achieved through higher levels ofcountries –have initiated reform agendas designed to growth Nonetheless Gao 2005 amongst othersimprove the efficiency and the scope of their domestic notes that while increased integration has given risefinancial systems and remove structural impediments to FDI with host countries benefiting from increasesthat may otherwise impede cross-border capitalin living standards one should still remain cautiousflows Consequently in recent times there has beenof the often-observed positive correlation betweena surge in the flows of both Foreign Directinward FDI and subsequent increases in economicInvestment FDI and portfolio investment withgrowth since the relation may not be causal BetterFDI now accounting for more than 60 of private understanding this relation therefore remains acapital flows Carkovic and Levine 2002 Alfarocritical empirical question since policy in support ofet al 2004 FDI strategies may otherwise fail to achieve desiredCorresponding author E-mail jabattenusthkApplied Economics ISSN 0003–6846 printISSN1466–4283 online 2009 Taylor Francis 1621httpinformaworldcomDOI 101080000368407014937581622 J A Batten and X V Vosocial and economic outcomes Mullen and Williams time-series dimension of the data instead of utilizing2005 also make this point when questioning thepurely cross-sectional estimatorsefficacy of regional development strategies focused on The remainder of this article is organized asattracting foreign investment although their analysis follows Section II reviews the literature on theof US state-led FDI does highlight its importance in impact of FDI on economic growth and introducesstimulating regions within well-integrated developed the theoretical framework Section III develops theeconomiesmodel assessing the impacts of FDI on economicThe objective of this study is to once again revisit growth describes the econometric methodology andthe link between growth and FDI and it does so by Section IV describes the data Section V reports theusing a comprehensive panel data set of 79 countries empirical results Finally Section VI allows for someand longer period 1980–2003 than other studies concluding commentswhich have taken single country or regional perspec-tives In addition we provide further insights byexamining an extensive range of economic financialinstitutional and policy conditions under which FDI IILinking FDI and Economic Growthmay affect economic growth This study makes threeimportant contributions first the use of panel data Backgroundsets applied to an extensive range of 79 countriesTheoretically FDI has been shown to boost eco-enable the extension of recent published studies innomic growth through technology transfer andFDI eg Li and Liu 2005 Schneider 2005 throughthe examination of an extensive array of FDI diffusion Dimelis 2005 Schneider 2005 spilloverindicators Specifically the gross stock of FDI effects Wang and Yu 2007 productivity gains andassets and liabilities stock of FDI liabilities grossthe introduction of new processes managerial skillsflows of FDI assets and liabilities and inflows of FDI andknow-how to host countries Girma 2005 Lias a share of GDP are examined The need forand Liu 2005 Lin and Yeh 2005 A number ofadopting stock as well as flow measures is that stock studies including those by Grossman and Helpmanmeasures accommodate the fluctuations present in1991 Barro and Sala-i-Martin 1995 and Hermesflows over the short run and variation over theand Lensink 2003 suggest that FDI plays anlong run important role in modernizing the economy andSecond while economic theories and some pre- promoting economic growth in host countriesvious empirical evidence suggest that FDI will only especially in developing countries In the case of thehave a positive growth effect under certain institu-latter it is also critical to coordinate foreign aid withtional and policy regimes we examine an extensivefollow-up FDI to imize its impact Blaise 2005array of interaction terms to determine those keyIn addition FDI can create an internationaleconomic financial institutional and policy condi- network that optimizes the movement of domestictions under which FDI supports growth Specifically products across borders creates cost savings andwe examine whether FDI has stronger and positive related scale and scope economies for corporationsimpacts on economic growth when countries haveNot all corporations engage in FDI or choose tohigher levels of real per capita GDP higher levels of internationalize there is an extensive separate litera-educational attainment lower population growthture that investigates corporate motivations andrates larger government size higher levels of inter-rationale The recent study by Wagner 2007 isnational trade lower inflation higher levels of bank illustrative and demonstrates that only the moreand stock market development and finally lower productive German firms choose to serve foreigncountry risk markets through exports and the most productiveThird the use of newly developed panel techniques among this group will undertake FDIcontrol the simultaneity bias that may have existed in Nonetheless the available empirical evidenceearlier studies This is induced by the standard suggests a complex set of interactions between FDIpractice of including lagged dependent variables in and observable economic factors Kottardi 2005growth regressions and the omission of country- which may be country or region specific Manyspecific factors Since each of these econometric country studies which deal with the productivitybiases is a serious concern in the assessment of theeffects of FDI spillovers on firms or plants usingFDI –economic growth nexus applying panel micro level data provide positive results on thetechniques enhance the level of statistical confidence role of FDI with respect to stimulating economicpossible with the empirical results Furthermoregrowth Positive effects from FDI spilloversthe panel approach allows the exploitation of thehave been found for example in MexicoSocial factors FDI and economic growth 1623Blomstrom and Persson 1983 Blomstrom andless-developed countries Another perspective byWolff 1994 Kokko 1994 Uruguay Kokko et al Choi 2007 demonstrates that income inequality1996 EU accession countries Janicki and Wunnava increases with FDI stocks as a percentage of GDP2004 and China Chuang and Hsu 2004 Other increase whereas increases in per capita GDP andresearch by Hejazi and Safarian 1999 for a number real per capita GDP growth rate reduce incomeof countries demonstrates that spillover effects inequality in a country Overall the diversity of theseincrease significantly with the inclusion of FDI in findings highlight the difficulty in making generalizedthe standard model thereby explaining the link to comments on the nexus between FDI and economictotal factor productivity and hence economic growth and the benefits that may arise based ongrowth While Dollar and Kraay 2001 2004 are simple correlation-based analysis Our contributionaware of the shortcomings of the cross-sectional offers further insights into these relationships byapproach they still find evidence to support a examining in more detail than other recent studies thepositive relationship between an increase in trade extensive range of economic financial institutionalflows FDI and higher growth rates More recentand policy conditions under which FDI may affectstudies on the miracle of Portugal Barbosa et al economic growth2004 and China Yao 2006 link the importance ofexport opportunities arising from FDI to sustainable A simple theoretical frameworkgrowth Others such as Lubker et al 2002 remain¨unconvinced about the validity of many of theseTo understand these relationships in a theoreticalresults due to the construction of data as well as their setting begin by considering the relationship betweentheoretical basis FDI and economic performance through interactionsOn the other hand some authors find no trace of with domestic investment and wider spillover effectsspillover effects in some country studies or if present The domestic economy then has technical progress asthe economic effect is minimal For example whilea result of capital deepening in the form of anBlomstrom 1986 finds that Mexican sectors with a increase in the number of types of capital goodshigher degree of foreign ownership exhibit fasteravailable as suggested by Romer 1990 Grossmanproductivity growth their study –and similar studies and Helpman 1991 Barro and Sala-i-Martin 1995– suffers from a critical identification problem ifBorensztein et al 1998 Berthelemy and Demurgerforeign investment gravitate towards more productive 2000 and Agenor 2003industries the observed positive correlation willThus in the spirit of these studies suppose that theoverstate the positive impact of FDI on growth economy produces a single consumption goodAitken and Harrisons 1999 study of plant level data according to the following technology relationfor Venezuela solves this problem and subsequently Y 1t AH K e1Tt tfinds no evidence of a positive technology spilloverThis result was consistent with Haddad andwhere A represents the exogenous state of theHarrisons 1993 study utilizing panel data for environment H represents human capital and KMorocco which also concludes that the net effect represents physical capital The state of the environ-of FDI on productivity is small In the case of Aitken ment in A comprises various control and policyand Harrisons 1999 study they find that FDI raises variables influencing the level of productivity in theproductivity within plants that receive the investment economy Assume that human capital H is a givenbut lowers that of domestically owned plants aendowment while physical capital consists of anfinding that contradicts spillover theory aggregate of different varieties of capital goodsSeveral empirical studies indicate that the growth Hence allow capital accumulation to take placeeffect of FDI is strongly dependent on the institu- through the expansion of a number of differenttional circumstances of the host or receiving countries varieties of capital goods each one denoted by x j asHermes and Lensink 2003 While others find thatin Ethier 1982 such that at each instant in time theFDI inflow is positively associated with economicstock of domestic capital is given byZgrowth only when countries have previously achieved N 1 e1T1a certain level of wealth Blomstrom et al 1994 K xej T dj e2Teducation Borensztein et al 1998 or financial 0development Hermes and Lensink 2003 AlfaroThat is total capital is a composite of a continuum ofet al 2004 On the other hand Carkovic and varieties of capital goods each one being denoted byLevine 2002 find that these results are not robustx j while N is the total number of varieties of capitalwhen controlling for simultaneity bias whilegoods Assume that there are two types of firms thatTownsend 2003 confirms this result using data for produce capital goods domestic and foreign firms1624 J A Batten and X V Vothat have undertaken a direct investment in thevarieties could be interpreted as an improvement ineconomy The domestic firms produce n varieties out the quality of existing goods If the presence ofof the total number N and the foreign firms produce foreign firms reduce the cost of improving the qualityn N n varieties that is ofexisting capital goods it will generate the samenegative relationship between FDI and setup costsN n t n e3TMoreover the catch-up assumption could be reinter-Also assume that specialized firms produce eachpreted as the cost of improving an existing capitalvariety of capital good and rent it out to final good goodis smaller the lower is its qualityproducers at a rental rate m j The optimal demand In addition to the fixed setup cost once a capitalfor each variety of capital good x j is determinedgood is introduced its owner must spend a constantby equating the rental rate m j and the marginal maintenance cost per period of time This is similar toproductivity of the capital good in the production of the assumption of there being a constant marginalthe final good This condition is cost of production of x j equal to unity and thatmej T Ae1 TH xej T e4Tcapital goods are fully depreciable Assume that theinterest rate r facing the firm is constant1 thenConsequently an increase in the variety of capitalprofits for the producer of a new variety of capital jrequires the adaptation of technology available indenoted by Q j are given bymore advanced countries to permit the introductionY n Ntof new types of capital goods This process of ej Tt F ttechnology adaptation to local needs requires a Nt Nfixed setup cost F before production of the new t Z 1 mej Txej T xej TerestT ds e6Ttype of capital can take place and this cost depends tnegatively on the ratio of the number of foreign firmsoperating in the host economy to the total number of imization of 6 when subjected to 4 producesfirms nN This assumption is made to capture the thefollowing equilibrium level for the production ofidea that foreign firms bring to the developingeach capital good x jeconomy an advance in knowledge applicable to 1 2xej T HA e1 T e7Tthe production of new capital goods that may bealready available in other countries ConsequentlyNote that x j is independent of time that is at everyFDI is the main channel of technological progress in instant the level of production of each new good is thethis framework by making it easier to adopt thesame Moreover the level of production of thetechnology necessary to provide new types of capital different varieties is also the same due to symmetryIn addition we assume the existence of a catch-up amongproducers Substituting Equation 7 into theeffect in technological progress to reflect the fact that demand function Equation 4 gives the followingit is cheaper to imitate products already in existence expression for the rental ratethan to create new products at the frontier ofinnovation This is implemented by assuming that mej T 1 e1 T e8Tthe setup cost depends positively on the variety ofwhich gives the rental rate as a markup overcapital produced domestically compared to that maintenance costsproduced in the more advanced countries which we Finally we assume that there is free entry anddenote by N That is in the countries with lower N hencethe rate of return r will be such that profits areN imitation possibilities are larger and thus the cost equal to zero Solving for the zero profits conditionof adopting new technology is lower Thus weallowspostulate the following functional form for thesetup cost n N 11r A F H e9TN Nn N F FF F where 50 and 40N N en NT eN NT wheree5Te1 Te2T 0An alternative interpretation of Equation 5 can begiven in terms of quality ladders as in Grossman and Toclose the model we need to describe theHelpman 1991 The increase in the number of process of capital accumulation which is driven by1 This is reasonable Graham and Harvey 2001 show that firmstypically apply a constant cost of capital when evaluatingcapital budgeting decisionsSocial factors FDI and economic growth 1625saving decisions Although for simplicity we do not variables have been included in an ad hoc manner andintroduce international trade in this model this is not then subsequently found – or not as the case may be –a closed economy due to the presence of foreignto be statistically significant Hermes and Lensinkfirms However with the proportion of foreign firms 2003 Nonetheless the empirical evidence suggestsremaining constant in a steady-state situationthat few variables have a robust effect on economicequilibrium conditions are analogous to those pre- growth Levine and Renelt 1992 King and Levinevailing in a closed economy Thus suppose that1993 The statistical implication of this finding isindividuals imize the following standard inter-that it is important to introduce satiability tests fortemporal utility function the explanatory variables to ensure robustness of anylater findings Sala-i-Martin 1997Z 1 C1 estTUt s e ds e10T From the above information it is possible tot 1formulate a model that incorporates the following characteristics First as the key objective of this where C denotes units of consumption of the final article is to investigate the effects of FDI on economic good Y Given a rate of return equal to r the optimal performance indicators which proxy for FDI must beconsumption path is given by the standard condition defined The indicator should be conceptually analo- _Ct 1 gous to the fraction of goods produced by foreignCt er T e 11Tfirms in the model nN The model must alsoincorporate variables familiar to those modellingIt is easy to verify that the rate of growth of economic growth A group of control and policyconsumption must in steady state equilibrium be variables are frequently included as determinants ofequal to the rate of growth of output which wegrowth in the literature Other indicators capturingdenote by g the catch-up effect NN should also be included inFinally substituting Equation 9 into Equation 11the modelwe obtain the following expression for the rate of Consequently we employ four indicators to proxygrowth of the economy for FDI including the gross stock of FDI"inflows t outflows as a share of GDP FDI011 n N 1g A1 F H e12Tstock of FDI inflows as a share of GDP FDI02N N gross FDI flows inflows t outflows as a share ofGDP FDI03 and FDI inflows as a share of GDPEquation 12 shows that FDI which is measured byFDI04the fraction of products produced by foreign firms inthe total number of products nN reduces the costFormulation 1of introducing new varieties of capital goods thusincreasing the rate at which new capital goods are To satisfy the conditions mentioned previously weintroduced The cost of introducing new capital follow Kormendi and Meguire 1985 where thegoods is also smaller for more backward countries explanatory variables are entered independently andthat is countries that produce fewer varieties oflinearly and formulate a growth model that iscapital goods than the leading countries –countries represented as followswith lower NN – enjoy lower costs of adoption ofg t I t FDI t X t e13T1 2 3technology and will tend to grow fasterFurthermore the effect of FDI on the growth rate andof the economy is positively associated with the levelg t I t FDI X t X t e14Tof human capital that is the higher the level of 4 5 6human capital in the host country the higher thewhere g is per capita GDP growth I is a set ofeffect of FDI on the growth rate of the economy variables always included in the regression andincludes the investment share of GDP INV theThe estimation procedure In the literatureprevious lagged level of real GDP per capita inexplaining economic growth eg Barro 1991 it isthe form of natural logarithm [GDP 1 ] which iscommon to model growth within a regression frame-the conditional convergence effect the annualwork However theory does not provide a clear guide secondary-school enrolment rate EDU and theas to which appropriate set of variables should be annual rate of population growth POPU both ofincluded in the growth regression equationthe latter variables are measures of the stock ofDepending on the aim of the study and the insight human capital FDI is one of the four FDI variablesand belief of the author s different explanatoryof interest FDI01–FDI04 X is a subset of variables1626 J A Batten and X V Vochosen from a pool of variables identified by past Of the 41 growth studies surveyed by Levine andstudies as potentially important explanatory variables Renelt 1991 33 include the investment share offor economic growth2 For simplicity the pool ofGDP 29 include population growth and 13 include avariables are defined in Table A1 but includes the measure of initial income In addition the I-variablesgovernment size indicator which is the ratio ofare consistent with a variety of new growth modelsgovernment consumption expenditures to GDPthat rely on constant returns to reproduce inputs orGOVCON the openness to international trade as endogenous technological change Barro 1990a share of GDP TRADE the annual inflation rate Romer 1990 Furthermore with these I-variablesINFLATION the ratio of domestic credit provided we can confirm the findings of a large number ofby banks to GDP DCBANK the size of stock empirical studies In recognition of the issues raisedmarkets STOCAP the international country riskby McAleer et al 1985 important changes in theguide index from PRS Group in natural logarithm I-variables do not significantly alter the estimationform ICRG 3 Note that a positive coefficient for 5 results Levine and Renelt 1992means that FDI has a stronger effect on economic As noted by Caselli et al 1996 most empiricalgrowth with a greater X4 studies which are investigating causes of growthsuffer from at least one of the following twoFormulation 2 estimation problems omitted variable bias andendogeneity The former problem could be seriousIn addition as in Carkovic and Levine 2002 and because the growth model includes a lagged depen-Edison et al 2002 we employ the followingdent variable the variable representing a catch-updynamic formulation effect In a dynamic specification serial correlationin the error term – which may be due to the omissiony y e 1Ty t X t t " e15Ti t i t1 i t1 i t i i tof a relevant explanatory variable – could lead towhich can be simplified to unreliable coefficient estimates The latter is a generalproblem in analysis of growth since many of they y t X t t " e16Ti t i t1 i t i i t determinants of growth are in turn arguably affectedby the rate of growth eg investment is often thoughtwhere y is the logarithm of real per capita GDP X isto be related to expected growth However there isthe set of explanatory variables as discussed above always a trade-off in seeking to minimize these and the investment share of GDP stock of human potential sources of bias in the estimatescapital but lagged per capita GDP is an unobservedTo obtain an unbiased empirical perspective two country-specific effect and " is the error term Theeconometric estimation techniques are then employedsubscripts i and t denote the country and time periodto estimate the models both of which have theirTo eliminate any country-specific effects the first-advantages and disadvantages We first use the fixeddifference of Equation 16 may be used givingeffect panel estimation to estimate the relationship0 between FDI and economic growth in formulationyi t yi t1 eyi t1 yi t2T t eXi t Xi t1Tt e"i t "i t1T e 17T1 Fixed effect estimation computes estimates fromdifferences in variables within country across time onThe main difference between the first Equation 15 the assumption that individual effects are correlatedand the latter Equation 17 formulation is that the over time but are unrelated to other regressors Thislatter model allows for the inclusion of a country- approach accommodates endogeneity problemsspecific effect If the country-specific parameter was although it does not attend to the problem of omittednot included random country-specific fluctuations variableswould be grouped and would bias the common errorIn addition the Generalized Method of Momentsterm Although few empirical studies include all of GMM panel estimation designed by Arellano andthese variables most studies control for some subsets Bover 1995 and Blundell and Bond 1997 is used2 These X-variables form the basis of the conditioning informationset because other studies have employed these variables orclose-related variables to stand for fiscal trade monetaryuncertainty and political-instability indicators This pool is keptsmall to make the results more tangible and digestible The resultsdo not depend importantly on choosing these variablescom4This can be mathematically proved as follows Differentiate Y withrespect to FDI to obtain X If 40 thenY FDI 5 5FDI would have a stronger effect on Y in a country with a higher levelof XSocial factors FDI and economic growth 1627This estimation extracts consistent and efficient Nevertheless as stated by many financial economistsestimates of the impact of FDI on economic growth heterogeneities in the data unavoidably remain inin formulation 2 The advantage of this GMM empirical studies using cross-country data Engelpanel estimation method5 is that it exploits time-。