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Volume :7 Issue : 1 2000      Add To Cart                                                                    Download

Foreign Direct Investment and Spillover Efficiency in the Developing Countries

Auther : Abdullah M. Al-Obaidan

This paper examines, within a new growth theory framework, the efficiency effect of foreign direct investment (FDI) for forty –four developing countries. The paper tests an interesting hypothesis advanced by many writers in international investment theory, such as Bhagwati and Das, who suggests a positive relationship between the level of FDI and technical efficiency. The model used to test the hypothesis is derived in conventional manner, from a production function. Application of the stochastic frontier function and the distribution-free model makes this study one of the most sophisticated empirical tests of the efficiency effect of FDI in the literature. The empirical results, ceteris paribus, confirm the relative technical efficiency of developing countries that have high FDI exposure.

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Nov 19, 2019

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