Impact Of Foreign Direct Investment On Economic Growth Essay

1585 Words Jan 23rd, 2016 null Page
2.1 FDI inflows with Economic Growth
In the early 1960s, scholars have noted the impact of foreign direct investment (MacDougall, 1960) for the general welfare , early contribution to the study of the spillover effect of foreign direct investment( spillover effects of FDI refers to the positive externalities of foreign direct investment in addition to a direct role than generated .) , including foreign direct investment also tariff policy as well as the host country the role of industry, etc. (Caves, 1971). In these early studies, although foreign direct investment on productivity externalities with foreign direct investment, such as the effect of government revenue, tax policy, trade, balance of payments, etc. are discussed together, but empirical analysis has shown multinational access to improve the efficiency of the local economy has a positive effect. In recent years, foreign direct investment in the foreign country receiving the contribution of economic growth began to receive attention, on the contribution of foreign investment to economic growth in developing countries, economists have a different perspectives. Among these perspective the most representative one which is the two -gap model pointed out by American economist H. Chenery and A. Strout in 1966 .The model considers that the course of economic development in most developing countries show that economic development is mainly constrained by three factors : First, the savings…

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