Thumbnail Image
Item

FDI inflows and economic growth: A novel application of dose-response functions

Cusimano, Alessandro
; 
Donegani, Chiara Paola
; 
Fantechi, Federico
; 
Authors
Cusimano, Alessandro
 Donegani, Chiara Paola
 Fantechi, Federico
 Godwin, Eun Sun
Editors
Other contributors
Affiliation
Epub Date
Issue Date
2024-03-11
Submitted date
Subjects
FDI
 economic growth
 dose-response functions
 continuous treatment
 foreign direct investment
Show all metadata
Files
Thumbnail Image
21607-72269-1-PB.pdf
Adobe PDF, 1.14 MB
Alternative
Abstract
In this work we estimate different dose-response functions linking FDI inflows received by developing countries with their economic growth. Although the impact of FDI on the economic growth of host countries has been widely investigated in literature, findings have been ambiguous. Our study proposes a novel ‘dose-response’ approach which allows the response of recipients to different amounts of treatment in terms of FDI inflow to be observed. Our findings show that the estimated dose-response functions are statistically significant for treatment values greater than 20%, after the treatment has been rescaled to a percentage measure of the maximum dose observed, and increasing at a decreasing rate, therefore suggesting three relevant results: a) a country receiving a greater amount of FDI inflows will present a higher economic growth; b) there might be a minimum amount of FDI inflows required to reach some policy effectiveness; c) the initial amounts of FDI inflow are more effective than the subsequent ones. Results will help policymakers to better isolate the effect of FDI on economic growth and conduct informed FDI cost-benefit analysis.
Citation
Cusimano, A., Donegani, C.P., Fantechi, F. and Godwin, E.S. (2024) FDI inflows and economic growth: A novel application of dose-response functions. Research in Applied Economics, 16(1), pp. 1-28.
Publisher
Macrothink Institute
Journal
Research in Applied Economics
Research Unit
URI
http://hdl.handle.net/2436/625493
DOI
10.5296/rae.v16i1
PubMed ID
PubMed Central ID
Embedded videos
Additional Links
https://doi.org/10.5296/rae.v16i1.21607
Type
Journal article
Language
en
Description
© 2024 The Authors. Published by Macrothink Institute. This is an open access article available under a Creative Commons licence. The published version can be accessed at the following link on the publisher’s website: https://doi.org/10.5296/rae.v16i1.21607
Series/Report no.
ISSN
1948-5433
EISSN
1948-5433
ISBN
ISMN
Gov't Doc #
Sponsors
Rights
Research Projects
Organizational Units
Journal Issue
Embedded videos
Collections
Faculty of Arts, Business and Social Sciences