The knowledge-capital model acknowledges that FDI has both vertical as well as horizontal elements. However, there is much controversy with regard to the empirical relevance of vertical FDI. We re-investigate this issue by looking at FDI at a more disaggregated level, using data on bilateral FDI in manufacturing and services for a number of industrialised countries. Our results are strongly sup...

The aim of this study is to the long run relationship among Foreign Direct Investment, Trade (Imports & Exports) and Economic growth for Pakistan. The co-integrating VAR framework is used to find the relationship over the period of 1965 to 2005. The results show that there are two long run relationships exist between GDP, Imports and Exports and FDI. First long run relationship shows that both ...

The objective of the paper is twofold. First, is to examine causal relationship between foreign direct investment (FDI) and economic growth in Malaysia and second, to look at the impact of FDI on the stability of economic growth and the impact of growth on stability of FDI. Using time series data, the paper implements the recent Toda and Yamamoto’s (1995) non-causality test to establish the dir...

Foreign direct investment (FDI) is a major factor in the globalization scenario. However, contrary to the core pro-market tenets of the economic school supporting globalization, the flows of FDI have grown side by side with a whole array of FDI subsidies dispensed by the “visible hand” of the state. Scholars have studied the links between FDI and economic growth and between subsidies and actual...

Conclusive evidence supporting the widely held view that developing countries should draw on foreign direct investment (FDI) to spur economic development is surprisingly hard to come by. We raise the proposition that results on the growth impact of FDI are ambiguous because highly aggregated FDI data, used in virtually all previous empirical studies, blur the differences between resourceseeking...

We analyse the Granger causal relationships between foreign direct investment (FDI) and GDP in a sample of 31 developing countries covering 31 years. Using estimators for heterogeneous panel data we find bi-directional causality between the FDI-to-GDP ratio and the level of GDP. FDI has a lasting impact on GDP, while GDP has no longrun impact on the FDI-to-GDP ratio. In that sense FDI causes gr...

Foreign Direct Investment (FDI) has great impact on the development of a developing country like Bangladesh. The foreign investor seeks for new sources of investment where the developing country seeks for new sources of fund to develop the country. The FDI does not only bring sources of fund in a developing country but also new technology in a developing country. The FDI has the important role ...

Our study investigates the firmand country-specific factors that affect the link between foreign direct investment (FDI) and trade. Specifically, we address the questions “do countryand firmspecific characteristics matter in Japanese FDI trade links?” and “do the counts and values of FDI that are often alternatively used in the empirical work convey the same message about this link?” Empiricall...

This paper examines the determinants of FDI from U.S. and Japan in China using the provincial data set from 1991 to 1997. The results of the regression analyses are further compared to those of the aggregated FDI as a benchmark case. The study found various similarities and differences in the importance and the magnitudes of the determinants of FDI among three FDI sources. It is shown that both...