FDI and Economic Growth in Asian Countries (堀山秀一教授退任記念号) FDI and economic growth in Asian countries
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Foreign Direct Investment (FDI) has been commonly regarded as indispensable element in the economic growth of developing countries. However, in many papers, the role of FDI in economic growth has been reexamined and recently it scems to have changed from "important and indispensable" into "something that cannot be performed as long as the fundamental conditions are not fulfilled in the proper order". In this paper, we examine empirical analyses such as the Granger causality test concerning the role that FDI has played for each economy using SNA macro data. Our result is that FDI neither necessarily contributes to economic growth nor to TFP in each country, but it rather seems to be led by growth of investment or the economic growth which has already taken place in Asia. For both cases where SNA data by country and pooled data of all countries are used, the null hypothesis that FDI does not cause the economic growth is not rejected for the most cases, which means that FDI does not prompt cconomic growth, on the contrary, economic growth leads the FDI growth in reality.
- Journal of economics
Journal of economics 107(3), 1-21, 2006-12
Osaka City University