Finance

FDI & Growth: What Ca commits What? By Abdur Chowdhury* & George Mavrotas** Abstract The paper examines the causative relationship betwixt FDI and economic return by utilise an innovative econometric methodology to study the direction of creator betwixt the deuce variables. We apply our methodology, based on the Toda-Yamamoto outpouring for causality, to time-series data cover the period 19692000 for three develop countries, namely Chile, Malaysia and Thailand, all of them study recipients of FDI with a different history of macroeconomic episodes, policy regimes and growth patterns. Our empiric findings clearly suggest that it is gross domestic product that causes FDI in the chemise of Chile and not vice versa, sequence for both Malaysia and Thailand, in that location is a strong demonstrate of a bi-directional causality between the two variables. The robustness of the higher up findings is confirmed by the use of a bootstrap strain employed to test the rigour of our results. Keywords: FDI, economic growth, causality, Toda-Yamamoto test. JEL classification: F39, O4, C32. report card to be presented at the WIDER assemblage on Sharing international Prosperity, WIDER, Helsinki, 6-7 September 2003. * discussion section of Economics, Marquette University, Milwaukee, United States. ** valet Institute for instruction Economics search of the United Nations University (UNU/WIDER).

arrangement to: Dr. George Mavrotas, query Fellow, World Institute for Development Economics Research of the United Nations University (UNU/WIDER), Katajanokanlaituri 6 B, FIN-00160 Hels inki, Finland, Tel. (+358)-9-61599219, Fax: ! (+358)-9-61599333, email: Mavrotas@wider.unu.edu 14/08/2003 2 1. Introduction The relationship between Foreign Direct investment funds funds (FDI) and economic growth has motivated a tangled empirical literature focusing on both industrial and developing countries. Neoclassical models of growth as well as endogenetic growth models provide the basis for most of the empirical become on the FDI-growth relationship. The...If you want to get a wide of the mark essay, tell apart it on our website: OrderCustomPaper.com

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