The Positive Impacts Of FDI And Economic Growth In Developing Countries
but the effect evolves and becomes positive over time. Balasubramanyam, et al (1996) studied 46 developing countries from 1970 to 1985 using cross sectional data and OLS regression. They found that FDI positively affects growth in countries implementing export promoting strategies and negatively affects growth in countries using import substitution strategies. Barrell and Pain (1999) investigated the effect of FDI by US multinational companies in 4 European countries. They found that FDI had positive impacts on host countries’ economic growth in situations where it came with technology and knowledge transfers. Taking into consideration countries’ governance, FDI and economic growth, Yosra, et al (2014) built a sample of 17 Middle East and North Africa (MENA) countries over the period 1996-2011 using the Generalized Method of Moments (GMM) on a dynamic panel. They found a positive and significant impact of FDI on growth. Similarly, using time series analysis to conduct a study involving 11 developing countries from East Asia and Latin America during a varying period between 1957 and 1997, Zhang (2001) also found that FDI has a positive effect on growth but contended that the magnitude of this effect depends on the host country’s characteristics (liberalized trade policy, level of education, macroeconomic stability). Studying 18 Latin American countries between 1970 and 1999 using panel data analysis, Bengoa et al. (2003) compared the fixed and the random effect
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