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http://dx.doi.org/10.5762/KAIS.2014.15.5.2732

An Empirical Study of Foreign Direct Investment and Economic Growth in Developing Countries  

Jeong, Dong-Won (Division of International Economics and Trade, Hoseo University)
Han, Jong-Ho (Division of International Economics and Trade, Hoseo University)
Lim, Chea-Sung (Department of Community Development, Kongju national University)
Publication Information
Journal of the Korea Academia-Industrial cooperation Society / v.15, no.5, 2014 , pp. 2732-2742 More about this Journal
Abstract
For the past decades, role of foreign direct investment has increased. Specially, East Asia and BRICs has experienced rapidly economic growth by FDI. Nevertheless, most of developing countries suffer from poverty. This paper empirically explores the impacts of FDI on economic output using a cross-country analysis based on data from 88 developing countries for the years 1990-2011. To this end, FDI is explicitly included in production function as production factor. Cross-country regression of income level is estimated with the country's human development, population growth, physical accumulation, and FDI as explanatory variables. Main finding of this paper is that FDI has a positive and significant impact on economic growth.
Keywords
foreign direct investment; economic output; cross-country analysis;
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