FDI and economic growth
Subtitle: the role of local financial markets
By: Laura Alfaro ... [et al.].
Contributors: Harvard Business School
Edition: Rev.
Series: Working paper / Division of Research, Harvard Business School -- 01-083; Working paper (Harvard Business School. Division of Research) -- 01-083
Publisher: Division of Research, Harvard Business School
Published: 2002
Place of publication: Boston
Language: eng
Number of pages: 34
Description: In this paper, we examine the various links among foreign direct investment (FDI), financial markets, and economic growth. We explore whether countries with better financial systems can exploit FDI more efficiently. Empirical analysis, using cross-country data between 1975-1995, shows that FDI alone plays an ambiguous role in contributing to economic growth. However, countries with well-developed financial markets gain significantly from FDI. The results are robust to different measures of financial market development, the inclusion of other determinants of economic growth, and consideration of endogeneity.
Notes: "Rev. 05/02."

Includes bibliographical references.