Foreign capital flows and economic growth in East Asian countries
This paper provides a quantitative assessment of the effect of various types of capital flow on the growth process of the East Asian countries, including China. The empirical analysis was based on dynamic panel data and we found; first, that domestic savings contribute positively to long-term econom...
| Main Authors: | , |
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| Format: | Article |
| Language: | English |
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Elsevier
2006
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| Online Access: | http://psasir.upm.edu.my/id/eprint/18314/1/Foreign%20capital%20flows%20and%20economic%20growth%20in%20East%20Asian%20countries.pdf |
| _version_ | 1825946169974456320 |
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| author | Baharumshah, Ahmad Zubaidi Thanoon, Marwan Abdul Malik |
| author_facet | Baharumshah, Ahmad Zubaidi Thanoon, Marwan Abdul Malik |
| author_sort | Baharumshah, Ahmad Zubaidi |
| collection | UPM |
| description | This paper provides a quantitative assessment of the effect of various types of capital flow on the growth process of the East Asian countries, including China. The empirical analysis was based on dynamic panel data and we found; first, that domestic savings contribute positively to long-term economic growth. Second, we confirmed that FDI is growth enhancing and that its impact is felt both in the short and long run. Additionally, FDI influence on growth is much higher than domestic savings. Third, short-term capital inflow has adverse effect on the long-term as well as short-term growth prospects and it appears to be sensitive to long-term capital inflows. Fourth, long-term debt has positive effect on growth but its effect does somewhat disappear in the long-term. By and large, the observed positive contribution of FDI in the growth process of East Asian economies is a robust finding. From policy perspective, the evidence convincingly suggests that countries that are successful in attracting FDI can finance more investments and grow faster than those that deter FDI. |
| first_indexed | 2024-03-06T07:42:52Z |
| format | Article |
| id | upm.eprints-18314 |
| institution | Universiti Putra Malaysia |
| language | English |
| last_indexed | 2024-03-06T07:42:52Z |
| publishDate | 2006 |
| publisher | Elsevier |
| record_format | dspace |
| spelling | upm.eprints-183142016-02-12T08:31:55Z http://psasir.upm.edu.my/id/eprint/18314/ Foreign capital flows and economic growth in East Asian countries Baharumshah, Ahmad Zubaidi Thanoon, Marwan Abdul Malik This paper provides a quantitative assessment of the effect of various types of capital flow on the growth process of the East Asian countries, including China. The empirical analysis was based on dynamic panel data and we found; first, that domestic savings contribute positively to long-term economic growth. Second, we confirmed that FDI is growth enhancing and that its impact is felt both in the short and long run. Additionally, FDI influence on growth is much higher than domestic savings. Third, short-term capital inflow has adverse effect on the long-term as well as short-term growth prospects and it appears to be sensitive to long-term capital inflows. Fourth, long-term debt has positive effect on growth but its effect does somewhat disappear in the long-term. By and large, the observed positive contribution of FDI in the growth process of East Asian economies is a robust finding. From policy perspective, the evidence convincingly suggests that countries that are successful in attracting FDI can finance more investments and grow faster than those that deter FDI. Elsevier 2006 Article PeerReviewed application/pdf en http://psasir.upm.edu.my/id/eprint/18314/1/Foreign%20capital%20flows%20and%20economic%20growth%20in%20East%20Asian%20countries.pdf Baharumshah, Ahmad Zubaidi and Thanoon, Marwan Abdul Malik (2006) Foreign capital flows and economic growth in East Asian countries. China Economic Review, 17 (1). pp. 70-83. ISSN 1043-951X; ESSN: 1873-7781 10.1016/j.chieco.2005.09.001 |
| spellingShingle | Baharumshah, Ahmad Zubaidi Thanoon, Marwan Abdul Malik Foreign capital flows and economic growth in East Asian countries |
| title | Foreign capital flows and economic growth in East Asian countries |
| title_full | Foreign capital flows and economic growth in East Asian countries |
| title_fullStr | Foreign capital flows and economic growth in East Asian countries |
| title_full_unstemmed | Foreign capital flows and economic growth in East Asian countries |
| title_short | Foreign capital flows and economic growth in East Asian countries |
| title_sort | foreign capital flows and economic growth in east asian countries |
| url | http://psasir.upm.edu.my/id/eprint/18314/1/Foreign%20capital%20flows%20and%20economic%20growth%20in%20East%20Asian%20countries.pdf |
| work_keys_str_mv | AT baharumshahahmadzubaidi foreigncapitalflowsandeconomicgrowthineastasiancountries AT thanoonmarwanabdulmalik foreigncapitalflowsandeconomicgrowthineastasiancountries |