The long-run effect of foreign direct investment on total factor productivity in developing countries: A panel cointegration analysis

Konferenzbeitrag

This paper examines the long-run effect of the level of foreign direct investment (FDI) on the level of total factor productivity (TFP) for 70 developing countries for the period 1981-2011 using panel cointegration techniques. It is found that (i) FDI has, on average, a negative long-run effect on TFP in developing countries; (ii) causality runs in only one direction, from FDI to TFP, and (iii) the long-run effect of FDI of TFP differs between selected groups of countries: while the estimated long-run FDI-TFP coefficients are significantly negative for subsamples of countries with lower levels of human capital, financial development, and trade openness, the coefficients are insignificant or significantly positive for subgroups of countries with higher levels of human capital, financial development, and trade openness.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Beiträge zur Jahrestagung des Vereins für Socialpolitik 2015: Ökonomische Entwicklung - Theorie und Politik - Session: Foreign Direct Investment II ; No. E05-V1

Classification and Topics

• Classification: Wirtschaft ; International Investment; Long-term Capital Movements ; Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence ; Single Equation Models; Single Variables: Panel Data Models; Spatio-temporal Models

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Herzer, Dierk
• Event: Veröffentlichung
• (when): 2015

Further information

• Handle: http://hdl.handle.net/10419/112827
• Last update: 10.03.2025, 11:44 AM CET