Discussion Paper
No. 2015-18 | March 10, 2015
Sasi Iamsiraroj and Hristos Doucouliagos
Does Growth Attract FDI?
(Published in Meta-Analysis in Theory and Practice)

Abstract

FDI is seen widely as a vital source of investment, technology transfer, and growth. The factors that attract FDI have been a longstanding source of debate. The authors present a comprehensive assessment of the accumulated evidence on one factor, the success of economic growth in attracting FDI. Meta-regression analysis is applied to 946 estimates from 140 empirical studies. The authors show that there is a robust positive correlation between growth and FDI. Significantly larger correlations are established for single country case studies than with cross-country analysis. It also appears that growth is slightly more correlated with FDI in developing countries.

JEL Classification:

O24, F21

Links

Cite As

[Please cite the corresponding journal article] Sasi Iamsiraroj and Hristos Doucouliagos (2015). Does Growth Attract FDI? Economics Discussion Papers, No 2015-18, Kiel Institute for the World Economy. http://www.economics-ejournal.org/economics/discussionpapers/2015-18


Comments and Questions



Tomáš Havránek, Institute of Economic Studies, Charles University, Prague - Referee report 1
March 16, 2015 - 09:39
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Anonymous - Referee report 2
April 21, 2015 - 10:23
The paper identifies and quantifies the effects of a host country’s economic growth on FDI inflows using a Meta-regression analysis (MRA).While I appreciate the clear and concise review of the growth-FDI literature, I have some concerns regarding the contribution of this paper from a policy perspective. This paper is related to literature on determinants of FDI.There is a much larger literature exploring the effects of FDI on growth, but still there is weak evidence that FDI generate positive spillovers for host countries’ economic growth. If FDI could be credibly shown to have a positive impact on economic growth, this would weaken the arguments for the still large (explicit and implicit) restrictions to which they are subject. This paper analyses the inverse relationship economic growth-FDI and does not aims to contribute to any actual policy debates. The main goal is to quantify the role of the economic growth as determinant of FDI inflows. At the beginning of the paper, authors should discuss the motivation of this assessment. The MRA is correctly referred to the most authoritative source in the literature and the choice of the explanatory variables are adequately discussed.The overall assessment of the paper is strongly positive, it is well written and the structure is good.

Anonymous - Referee report 3
April 23, 2015 - 11:41
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Sasi Iamsiraroj and Hristos Doucouliagos - Response to referees
May 05, 2015 - 08:49
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