Economic Growth and FDI in Asia: A Panel-Data Approach

This study examines the impact of foreign direct investment on economic growth in Asian countries. We did our analysis in the panel framework for the period 1986 to 2008. We also examined the nonlinearities associated with foreign direct investment and exports in the economic growth process of Asian countries under consideration. We find that both foreign direct investment and exports enhance the growth process. In addition, labour and capital also play an important role in the growth of Asian countries. We suggest an export-led growth path particularly at the initial stage of growth and in the later period, dependence on FDI might be a feasible option.