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 exploitation an innovative econometric methodology to study the direction of motive betwixt the deuce variables. We apply our methodology, based on the Toda-Yamamoto essay for causality, to time-series data cover the period 19692000 for three develop countries, viz. Chile, Malaysia and Thailand, all of them study recipients of FDI with a different history of macroeconomic episodes, policy regimes and growth patterns. Our observational findings clearly suggest that it is gross domestic product that causes FDI in the chemise of Chile and not vice versa, epoch for both Malaysia and Thailand, in that location is a strong bear witness of a bi-directional causality between the two variables. The robustness of the supra findings is confirmed by the use of a bootstrap turn up employed to test the rigour of our results. Keywords: FDI, economic growth, causality, Toda-Yamamoto test. JEL classification: F39, O4, C32. write up to be presented at the WIDER assemblage on Sharing planetary Prosperity, WIDER, Helsinki, 6-7 September 2003. * discussion section of Economics, Marquette University, Milwaukee, United States. ** homo Institute for instruction Economics search of the United Nations University (UNU/WIDER).

balance wheel to: Dr. George Mavrotas, search Fellow, World Institute for Development Economics Research of the United Nations University (UNU/WIDER), Katajanokanlaituri 6 B, FIN-00160 Helsinki, F inland, Tel. (+358)-9-61599219, Fax: (+358)-! 9-61599333, email: Mavrotas@wider.unu.edu 14/08/2003 2 1. Introduction The relationship between Foreign Direct enthronization funds (FDI) and economic growth has motivated a rich 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 in full essay, tell apart it on our website: OrderCustomPaper.com

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