FDI, banking crises and growth: direct and spill over effects

Brahim Gaies , Stéphane Goutte (1) , Khaled Guesmi

1 LED - Laboratoire d'Economie Dionysien

This study suggests a new decomposition of the effect of foreign direct investment (FDI) on the long-term growth of developing countries. It reveals that FDI not only has a direct positive effect on growth, but also increases it by reducing the recessionary effect resulting from a banking crisis. However, these advantages are conditioned by the FDI threshold, which in turn depends on the "absorption capacity" of the host country. JEL: F65, F36, G01, G15

Mots clés: growth; FDI; system GMM; panel logit model 2

Domaines: Sciences de l'Homme et Société; Economies et finances; Méthodes et statistiques

Brahim Gaies, Stéphane Goutte, Khaled Guesmi. FDI, banking crises and growth: direct and spill over effects. 2019. ⟨halshs-01967999⟩