TY - JOUR
T1 - Foreign direct investment, capital accumulation, and growth
T2 - The rise of the Emerging South
AU - Demir, Firat
AU - Lee, Sunhyung
N1 - Funding Information:
We thank Pallab Ghosh, Jaeho Kim, Cynthia Rogers, and the session participants at the Eastern Economic Association annual conference in 2016 and seminar participants at the Colorado State University and the University of Oklahoma in 2018, as well as the Bank of Korea and the Korea Institute for International Economic Policy in 2020 for their comments on earlier drafts of this paper. We thank Xiaoman Duan, Xiaokai Li, Wenliang Ren and Ying Zhang for their research assistance. The usual disclaimer applies. This research did not receive any specific grant from funding agencies in the public, commercial, or not-for-profit sectors.
Publisher Copyright:
© 2022 Elsevier Inc.
PY - 2022/7
Y1 - 2022/7
N2 - Using a unique dataset on bilateral FDI flows between 1990 and 2012, we analyze the heterogeneous growth effects of FDI originating from the North, the Emerging South, and the South in each country group. After controlling for the aggregation bias, sample selection bias, country heterogeneity, and endogeneity issues, and using various estimation techniques and robustness tests, we detect no long-run effects of FDI on the host country per capita GDP growth, independent of its direction. However, we find a significantly positive effect on long-run levels of GDP per capita in the sub-country groups of North–North, Emerging-North, and South-Emerging. The effects are stronger for countries with similar institutional development levels.
AB - Using a unique dataset on bilateral FDI flows between 1990 and 2012, we analyze the heterogeneous growth effects of FDI originating from the North, the Emerging South, and the South in each country group. After controlling for the aggregation bias, sample selection bias, country heterogeneity, and endogeneity issues, and using various estimation techniques and robustness tests, we detect no long-run effects of FDI on the host country per capita GDP growth, independent of its direction. However, we find a significantly positive effect on long-run levels of GDP per capita in the sub-country groups of North–North, Emerging-North, and South-Emerging. The effects are stronger for countries with similar institutional development levels.
KW - Capital accumulation
KW - Economic growth
KW - Foreign direct investment
KW - North–South heterogeneity
UR - http://www.scopus.com/inward/record.url?scp=85126928973&partnerID=8YFLogxK
U2 - 10.1016/j.iref.2022.02.044
DO - 10.1016/j.iref.2022.02.044
M3 - Article
AN - SCOPUS:85126928973
SN - 1059-0560
VL - 80
SP - 779
EP - 794
JO - International Review of Economics and Finance
JF - International Review of Economics and Finance
ER -
