FDI and economic growth: A new look from the sectoral perspective

Artikel

This paper investigates the impact of foreign direct investment (FDI) on economic growth in a sample of 10 ex-socialist European and Asian countries. While the link between FDI and economic growth has been extensively investigated in empirical literature, this paper contributes to this literature by econometrically investigating the effects of FDI inflows in specific sectors using the panel data estimation techniques. In addition to confirming the positive impact of total FDI inflows on economic growth, using the WiiW (the Vienna Institute for International Economic Studies) FDI database, which disentangles the FDI data across different industries, the paper finds significant effects of FDI inflows in manufacturing on growth, whereas FDI inflows in other sectors are only sporadically statistically significant. This finding serves as a basis for further investigation of the specific subsectors (NACE 2-letter classification) within manufacturing, and the empirical investigation finds that not all FDI inflows within manufacturing enhance economic growth.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Journal: Naše gospodarstvo / Our Economy ; ISSN: 2385-8052 ; Volume: 68 ; Year: 2022 ; Issue: 4 ; Pages: 1-11

Classification and Topics

• Classification: Wirtschaft ; International Investment; Long-term Capital Movements ; Economic Growth of Open Economies ; Single Equation Models; Single Variables: Panel Data Models; Spatio-temporal Models ; Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
• Subject: FDI ; Economic growth ; Sectoral data ; Manufacturing

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Šimić, Vladimir ; Malešević-Perović, Lena
• Event: Veröffentlichung
• (who): Sciendo
• (where): Warsaw
• (when): 2022

Further information

• DOI: doi:10.2478/ngoe-2022-0019
• Last update: 10.03.2025, 11:44 AM CET