TY - JOUR
T1 - Foreign direct investment and economic growth
T2 - The role of democracy
AU - Ayub, Muhammad
AU - Azman-Saini, W. N.W.
AU - Laila, Nisful
AU - Mongid, Abdul
AU - Ismail, Wan Zulqurnain Wan
N1 - Publisher Copyright:
© 2019, Universita Putra Malaysia.
PY - 2019
Y1 - 2019
N2 - This study investigates the growth-effect of foreign direct investment (FDI) in 67 developing countries covering from 1984 to 2016, with a special emphasis on the role of democracy. The empirical results obtained from generalized method of moments (GMM) estimation demonstrate that democracy plays a crucial role in moderating the positive effect of FDI on output growth. The results are robust to several alternative measures of democracy and FDI. This suggests that the marginal effect of FDI on growth depends on the level of democracy such that countries which promote democratic institution benefit more from FDI inflows. The finding is consistent with the growing view that the growth-effect of FDI depends on other intervening factors in the host countries.
AB - This study investigates the growth-effect of foreign direct investment (FDI) in 67 developing countries covering from 1984 to 2016, with a special emphasis on the role of democracy. The empirical results obtained from generalized method of moments (GMM) estimation demonstrate that democracy plays a crucial role in moderating the positive effect of FDI on output growth. The results are robust to several alternative measures of democracy and FDI. This suggests that the marginal effect of FDI on growth depends on the level of democracy such that countries which promote democratic institution benefit more from FDI inflows. The finding is consistent with the growing view that the growth-effect of FDI depends on other intervening factors in the host countries.
KW - Democracy
KW - Dynamic panel data analysis
KW - Economic growth
KW - Foreign direct investment
UR - http://www.scopus.com/inward/record.url?scp=85077542447&partnerID=8YFLogxK
M3 - Article
AN - SCOPUS:85077542447
SN - 1823-836X
VL - 13
SP - 481
EP - 493
JO - International Journal of Economics and Management
JF - International Journal of Economics and Management
IS - 2
ER -