Economic Growth and FDI Inflows: A Stochastic Frontier Analysis

Title
Economic Growth and FDI Inflows: A Stochastic Frontier Analysis
Publication Date
2010
Author(s)
Wijeweera, Albert
Villano, Renato
( author )
OrcID: https://orcid.org/0000-0003-2581-6623
Email: rvillan2@une.edu.au
UNE Id une-id:rvillan2
Dollery, Brian E
Type of document
Journal Article
Language
en
Entity Type
Publication
Publisher
Tennessee State University
Place of publication
United States of America
DOI
10.1353/jda.0.0059
UNE publication id
une:6347
Abstract
Despite plausible theoretical grounds for presuming a positive relationship between foreign direct investment inflows (FDI) and economic growth, existing empirical evidence on this nexus is inconclusive. In an effort to add to the empirical literature, this paper estimates the relationship between FDI and the rate of growth of GDP using a stochastic frontier model and employing panel data covering 45 countries over the period 1997 to 2004. We find that FDI inflows exert a positive impact on economic growth only in the presence of a highly skilled labour; corruption has a negative impact on economic growth; and trade openness increases economic growth by means of efficiency gains.
Link
Citation
Journal of Developing Areas, 43(2), p. 143-158
ISSN
1548-2278
0022-037X
Start page
143
End page
158

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