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Applied Economics Letters Volume 15, 2008 - Issue 11
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Original Articles

Economic growth in the presence of FDI: the perspective of newly industrializing economies

Shujie Yao School of Contemporary Chinese Studies, University of Nottingham, UK; School of Economics and Finance, Xi'an Jiaotong University, ChinaCorrespondence[email protected]
,
Kailei Wei Middlesex University Business School, London, UK
,
Genfu Feng School of Economics and Finance, Xi'an Jiaotong University, China
&
Lin Song School of Economics and Finance, Xi'an Jiaotong University, China
Pages 887-891 | Published online: 12 Sep 2008
 
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Abstract

This article presents two propositions on the role of FDI in economic growth: (1) FDI is a mover of production efficiency and (2) FDI is a shifter of the host country's production frontier. It then employs a production function with a large panel data set from the Chinese regions over 1979–2003 to test the propositions.

Notes

1 The mean value of ln(FDI/(DI + FDI)) is 0.182, multiplying this by the long-run elasticity of 0.032 gives a value of 0.58%.

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