A network approach to study the effects of foreign direct investment on economic growth
DOI:
https://doi.org/10.55444/2451.7321.2021.v59.n1.36334Keywords:
Foreign direct investment, networks, economic growthAbstract
Empirical papers on Foreign Direct Investment (FDI) produced ambiguous evidence on the sign and magnitude that it has on economic growth. This paper uses a network approach to evaluate if interconnectedness measures of FDI flows, namely network centrality, have an effect on growth. It uses a database of 175 countries for the 2001-2012 period. Results indicate that there is a negative effect of local centrality (degree) and a positive one for global centrality measures on economic growth. The latter result suggests that the ability of FDI to produce positive effects on economic growth relies on the degree of interconnectedness of the countries to others with a relatively better position in the global investment network.
Reception date: May 4, 2020
Acceptance date: October 24, 2020
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