What Are the Impact of FDI to Economic Growth?

Abstract

FDI has been perceived as important factor for economic growth in the African countries. FDI seems to contribute in the economic growth through the following channels. (a)  Firms spills over effect (b) introducing new technology (c) enhancing R& D services (d) increasing employment opportunities (e) enhancing trade development. However, the empirical literatures has not clear consensus in believing that FDI has positive contribution to the economic growth. Furthermore, the causal relation between FDI and economic growth has still remained as country specific results. Unfortunately, most of these researches have been conducted in developed and middle income countries especially East Asian countries.