Foreign Direct Investment and Economic Growth

This book consists of three empirical research papers on FDI inflow and economic growth and the role the host country natural resources abundance and institutional quality play in altering the FDI-growth relationship.The first paper investigates the FDI-growth nexus and the impact of natural resource abundance in the host country on the FDI-growth nexus. For a large dataset of 117 countries for the period 1991-2016, the system GMM estimation method is applied to investigate the impact of FDI inflow on economic growth and the role of the natural resource sector on the FDI-growth relationship. In the second paper, I used the fixed effect Threshold Model for panel data with annual frequency for 83 countries. The results show that FDI inflow has a stronger positive impact on the economic growth of the host country if the host country’s natural resources export is below the statistically significant estimated threshold compared to countries with natural resources export larger than the estimated threshold. The third paper explores the role of institutional quality in economic growth and, more specifically, the role it plays via the channel of foreign direct investments.