Impact of FDI on Economic Growth in Developing Countries: Role of Human Capital

• 발행기관: 서울대학교 경제연구소
• 저자명: Muhammad Ramzan Bin Sheng Sumbal Fatima Zhilun Jiao
• 간행물 정보: 『Seoul Journal of Economics』Seoul Journal of Economics Volume 32 No.3, 337~360쪽, 전체 24쪽
• 주제분류: 경제경영 > 경제학
• 파일형태: PDF
• 발행일자: 2019.08.30

영문 초록

Economic theory proposes that FDI is one of the primary driving forces for stimulating growth (Barro and Sala-i-Martin 1995). Researchers still debate whether the interpretation of the direct effect of FDI on economic growth is inconclusive, whereas the significance of the absorptive capacity of host countries is commonly emphasized (e.g., Borensztein, De Gregorio, and Lee 1998; De Mello Jr. 1999; Alfaro et al. 2004; Makki and Somwaru 2004; Gönel and Aksoy, 2016). Such uncertainty may be the result of ignoring the effect of certain conditioning variables. This study aims to empirically explore whether FDI contributes to economic growth and whether the effect varies with the human capital development level in a panel data set of 70 developing economies from 1980 to 2015. The study employs the General Methods of Moments estimation instrumental variable technique to deal with the endogeneity issue. The empirical investigation shows that human capital threshold exists above which FDI exhibits a positive impact and below where it shows a detrimental effect on economic growth. Findings may help policymakers in selected developing countries to take advantage of the increasing international investment by considering domestic human capital development level.

키워드

FDI Human capital development level Economic growth Developing countries System GMM