Growth effects of FDI and portfolio investment flows to developing countries: A disaggregated analysis by income levels

Glauco de Vita; Khine S. Kyaw

doi:10.1080/13504850601018437

Growth effects of FDI and portfolio investment flows to developing countries: A disaggregated analysis by income levels

Glauco de Vita^*, Khine S. Kyaw

^*Corresponding author for this work

Research output: Contribution to journal › Article › peer-review

50 Citations (Scopus)

Abstract

What is the impact of foreign direct investment (FDI) and portfolio investment flows on the economic growth of low-, lower middle- and upper middle-income countries? In this article we address this question using a dynamic panel model and a large data set of 126 developing countries for the period 1985 to 2002. Employing the system-generalized methods of moments (GMM) estimation approach, our findings suggest that only developing countries that have reached a minimum level of economic development and absorptive capacity are capturing the growth-enhancing effects of both forms of investment inflows.

Original language	English
Pages (from-to)	277-283
Number of pages	7
Journal	Applied Economics Letters
Volume	16
Issue number	3
DOIs	https://doi.org/10.1080/13504850601018437
Publication status	Published - 23 Jun 2009
Externally published	Yes

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abstract = "What is the impact of foreign direct investment (FDI) and portfolio investment flows on the economic growth of low-, lower middle- and upper middle-income countries? In this article we address this question using a dynamic panel model and a large data set of 126 developing countries for the period 1985 to 2002. Employing the system-generalized methods of moments (GMM) estimation approach, our findings suggest that only developing countries that have reached a minimum level of economic development and absorptive capacity are capturing the growth-enhancing effects of both forms of investment inflows.",

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AB - What is the impact of foreign direct investment (FDI) and portfolio investment flows on the economic growth of low-, lower middle- and upper middle-income countries? In this article we address this question using a dynamic panel model and a large data set of 126 developing countries for the period 1985 to 2002. Employing the system-generalized methods of moments (GMM) estimation approach, our findings suggest that only developing countries that have reached a minimum level of economic development and absorptive capacity are capturing the growth-enhancing effects of both forms of investment inflows.

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Growth effects of FDI and portfolio investment flows to developing countries: A disaggregated analysis by income levels

Abstract

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