World Economy · 2008 · 241 citations · 21 references
BusinessBusiness EconomicsEconomicsDevelopment EconomicsEconomic DevelopmentForeign Direct InvestmentCointegration AnalysisFdi DeterminantsGrowth TheoryInvestmentCausalityEconomic Growth DynamicsForeign Direct Investment AnalysisForeign Direct Investment LinkagesImpulse ResponseImpulse Response FunctionMultinational Enterprise InvestmentVariance Decomposition
This paper investigates the causal link between foreign direct investment (FDI), domestic investment and economic growth in China for the period 1988–2003 using a multivariate VAR system with error correction model (ECM) and the innovation accounting (variance decomposition and impulse response function analysis) techniques. The results show that while there is a bi‐directional causality between domestic investment and economic growth, there is only a single‐directional causality from FDI to domestic investment and to economic growth. Rather than crowding out domestic investment, FDI is found to be complementary with domestic investment. Thus, FDI has not only assisted in overcoming shortage of capital, it has also stimulated economic growth through complementing domestic investment in China.
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Applied econometric time series
Walter Enders · Journal of Macroeconomics · 1995 · 4.4K citations
Business, Economics, Econometrics +11
Applied Econometric Time Series.
mw, Walter Enders · Journal of the American Statistical Association · 1995 · 3K citations