Economic growth in the presence of FDI: The perspective of newly industrialising economies

Relationship between Foreign Direct Investment and Country Population

“…As discussed earlier, the emergence of the two most populous countries of the world China and India as future financial powers establishes a prima-facie case in favor of a positive impact of the population on economic growth. If we assume that FDI is positively related to economic growth of a country (Alfaro et al, 2004, Beugelsdijk et al, 2008, Yao & Wei, 2007 the present findings of a positive relationship between the population and FDI indirectly refute Malthusian doctrine of a disastrous effect of a large population on the economic growth of a nation. The findings of the present study suggest that MNEs may be considering population of a country as a factor in their decision to invest in a country.…”

“…Domestic investment may accelerate economic growth but new technology is usually acquired through FDI (Yao & Wei, 2007). Borensztein, De Gregorio, and Lee (1998) believe that FDI results in technology diffusion necessary for economic growth through a process of 'capital deepening'.…”

“…These effects include among other things, productivity gains, technology transfers, and the introduction of new processes, managerial skills, and know-how in the domestic market, employee training, international production networks, and access to markets. Yao and Wei (2007) analyzed the gains in production by host countries and concluded that FDI is a major contributor to the economic growth of developing countries who are trying to 'catch up' with the more advanced economies of the world. Beugelsdijk, Smeets, and Zwinkels (2008) found that both vertical and horizontal FDI have a positive effect on the growth of the host country.…”

Tacit and explicit knowledge spillover on regional economic growth: Evidence from China

“…Standard errors in parentheses; d.* p < 0.10, ** p < 0.05, *** p < 0.01 From the results in table 1, we can see clearly that TKS has a positive effect on GDP at the10% significant level, so do the roles of foreign (FTI)and domestic(DTI) technology imports. The higher contribution of capital to regional GDP(0.485) compared with labor(0.361) is different to previous studies (Yao,2007 [6] )which means China is shifting from labor-intensive economy to capital-intensive economy. What's more, the export and FDI variables are also positive and significant with elasticity hovering around 0.112 and 0.0170 separately, implying that they also have a significant impact on GDP, particularly the elasticity of export is just less than that of labor and capital which reinforces the importance of export-oriented growth for China.…”

Foreign direct investment, exports and economic growth: evidence from two panels of developing countries

“…The study by Yao and Wei (2007) presented and tested two propositions on the role of FDI in economic growth for newly industrialised economies. Firstly, FDI is an improving factor for production efficiency, because it helps reduce the gap between the actual level of production and a steady state production frontier.…”