Did FDI Really Cause Chinese Economic Growth? A Meta-Analysis

Gunby, Philip; Jin, Yinghua; Reed, W. Robert

doi:10.1016/j.worlddev.2016.10.001

Cited by 112 publications

(78 citation statements)

References 61 publications

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“…This condition shows that there is a causality relationship from foreign direct investment to the economic growth. Tan and Tang (2016), Afşar (2008), Andraz and Rodrigues (2010) and Gunby et al (2017) also underlined the same conclusion in their studies. Therefore, it can be said that developing countries should give importance to attract foreign investors to provide economic improvement.…”

Section: Analysis Resultssupporting

confidence: 53%

“…Similar to this study, Chakraborty and Basu (2002) also emphasized the same issue for India by using Vector Error Correction Method. Moreover, Kottaridi and Stengos (2010), Anwar and Nguyen (2010), Makki and Somwaru (2004), Tan and Tang (2016), Afşar (2008), Andraz and Rodrigues (2010), Gunby et al (2017) and Iqbal et al (2010) underlined the importance of foreign direct investment in economic growth.…”

Section: Literature Reviewmentioning

confidence: 99%

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Causality Relationship Between Foreign Direct Investments and Economic Improvement for Developing Economies

Adalı¹,

Yüksel²

2017

mjecon

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The aim of this study is to determine whether there is a causality relationship between foreign direct investments and economic growth for developing countries. Within this context, 30 developing countries, which have the highest GDP growth rate in 2016, are taken into the consideration. Furthermore, annual data of these countries for the periods between 1991 and 2015 is evaluated with the help of Dumitrescu Hurlin panel causality analysis. It is concluded that there is a causality relationship from foreign direct investments to economic growth. In other words, it is identified that foreign direct investment is an important cause of economic growth. Hence, it can be said that developing countries should focus on the ways to attract foreign direct investments to their companies in order to have economic growth. In addition to this situation, it is also identified that there is a causality relationship from economic growth to FDI. This situation shows that when the economies of the countries are improved, it attracts foreign investors to make a direct investment in those countries. Keywords

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Section: Analysis Resultssupporting

confidence: 53%

Section: Literature Reviewmentioning

confidence: 99%

Causality Relationship Between Foreign Direct Investments and Economic Improvement for Developing Economies

Adalı¹,

Yüksel²

2017

mjecon

View full text Add to dashboard Cite

show abstract

“…In contrast, Yalta () employed a simulation‐based test and found that a statistically substantial connection between FDI inflows and GDP growth does not exist. However, Gunby et al () suggested that FDI‐linked productivity spillovers are not significantly associated with Chinese economic growth. Analysing the FDI, growth, and exports association, Ahmad et al () found a bi‐directional causal link between FDI and economic growth for ASEAN countries.…”

Section: Literature Reviewmentioning

confidence: 99%

China's economic development: does exchange rate and FDI nexus matter?

Ahmad

Draz

Yang

2019

Asian-Pac Economic Lit

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This study aims to investigate the relationship between China's exchange rate, foreign direct investment (FDI) inflows, and economic development. We applied the bound testing approach on aggregate level data from 1981 to 2013. The results showed that the Chinese economy benefitted from a lower exchange rate over this period, and that there was a direct link between FDI inflows and economic development on an aggregate level both in the long and short run. The results of the Granger causality test identified a long‐ and short‐run association among these variables. The GMM estimations with dummies for financial crises and RMB exchange rate policy fluctuations also confirmed the growth enhancing impact of the exchange rate and FDI inflows. To promote sustainable economic development in the future, China should focus on improving the levels of domestic investment and human capital, as well as supervising the level of openness and capital controls.

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“…The authors indicated that productivity spillovers can be identified as the key element of FDI stimulating process on economic growth. According to the authors' conclusion "the effect of FDI on Chinese economic growth is much smaller than one would expect from a naïve aggregation of existing estimates" (Gunby et al, 2017).…”

Section: Introductionmentioning

confidence: 97%

Impact of foreign direct investment on economic growth in the world during 1975–2015

Brychka

2018

SMLNUVMBE

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The study is concentrated on examination the impact of FDI on economic growth in the World during 1975–2015. The study consists of four consecutive parts, including introduction, literature review, model and methodology, data, empirical results and conclusion. Each part of the study is focused on its own goals. According to the results of the literature review, there is positive influence of FDI on economic growth in various countries. Economic growth is one of the most important goals of any country. The country image on the international level is dependent on its economic power. Economic growth provides an opportunity to improve the living standards in the country. Most researchers conclude that there is a positive influence of FDI on the countries’ economic growth. However, the impact of FDI is strong in developing countries. Moreover, this relationship is stronger in countries with higher educational and technological level, trade openness and development of the countries’ stock markets. Economists often build regression models to estimate the relationship between the variables. In order to find the impact of FDI on economic growth, we are going to apply linear regression models. We take two variables as indicators of the countries’ economic growth, including current GDP expressed in U.S dollars, and annual GDP growth rate. Taking into account that the World’s GDP in current U.S dollar is a factor variable with the mentioned resulting variables, the regression equation looks as follows: The R-squared of the built model is 0.99, indicating that roughly 100% of changes in the World’s GDP is caused by the chosen factors. As it is seen from the SAS output, the residuals of dependent variable and factors variables are distributed normally among its average value. Thus, non-normality is not observed in the model. Taking into account the coefficients of the factor variables, the log GDP is most sensitive to the changes in trade as a percent of GDP. The log GDP is not quite sensitive to the changes in FDI, since the coefficient of 0.000128 means that increasing of FDI by one unit increase the logarithmic value of GDP by $ 0.000128.

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Did FDI Really Cause Chinese Economic Growth? A Meta-Analysis

Cited by 112 publications

References 61 publications

Causality Relationship Between Foreign Direct Investments and Economic Improvement for Developing Economies

Causality Relationship Between Foreign Direct Investments and Economic Improvement for Developing Economies

China's economic development: does exchange rate and FDI nexus matter?

Impact of foreign direct investment on economic growth in the world during 1975–2015

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