Impact of FDI on economic growth in EU countries (1974-1999) (424)

Theme Track: Regional Competitiveness - Foreign Investment and Trade

Authors:
Frias, Isidro ; Iglesias, Ana ; Vazquez, Emilia

The purpose of this paper is to test the effect that foreign direct investment (FDI) has had in the economic growth of EU countries since 1973 crisis. In this respect, we investigate if there are meaningful differences among countries based on their level of development and their endowment of productive inputs. As we are interested in technological transfers and other spillover effects, gross FDI data are collected from FMI Balance of Payments Statistic Yearbook. Gross FDI data are perfectly suitable for our study because outflows of direct investment do not have the same effect over the economies (in opposite direction) than inflows. Besides, availability of bilateral flows for some EU countries in OECD International Direct Investment Statistics Yearbook has let us make a complementary descriptive analysis.

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