جهانی شدن مالی، همگرایی و رشد: نقش سرمایه گذاری مستقیم خارجی

Using a panel dataset covering 139 countries over the 1970–2009 period, we empirically investigate the role of foreign direct investment on growth through diffusion of technology and innovation. Using an otherwise standard growth regression and regressions on productivity growth, we introduce a direct effect of foreign direct investment, which may be proxying for innovation, and an indirect effect, to capture the role of technological catch-up. We find that these two mechanisms have a positive effect on productivity growth and on GDP growth. These results are consistent with an open economy model, in which foreign direct investment affects growth through diffusion of technology and innovation.

The ratio of international financial integration (the sum of the stocks of foreign assets and liabilities) over GDP gives an idea of the dramatic increase of financial globalization in the last decades. Following Lane and Milesi-Ferretti (2007), this ratio increased by a factor of 7, from 45% in 1970 to over 300% in 2004. The theory suggests that financial globalization would lead to a better allocation of resources, implying an increase of growth, with capital going from industrial to developing countries. But there is no conclusive and robust empirical evidence of a positive effect of financial globalization on growth, as stated by Kose et al., 2009a and Kose et al., 2009b after surveying this literature. In this paper, we empirically investigate the role of foreign direct investment on growth through diffusion of technology and innovation. Using standard GDP growth regressions and regressions on productivity growth, we introduce a direct effect of foreign direct investment, which may be proxying for innovation, and an indirect effect of FDI that works by accelerating technological catch-up. Specifically, in these regressions there is an interaction of foreign direct investment with the extent of the country's current technological gap. We find that FDI has a positive effect on productivity growth and on GDP growth through these mechanisms. To motivate and guide the empirical analysis, we present in Section 3 a small open economy model, based on Barro et al. (1995), where only a portion of the capital serves as collateral in international markets. We introduce productivity growth in this model as an endogenous variable, assuming an effect of foreign direct investment on diffusion of technology and innovation and, thus, also on GDP growth. The diffusion of technology depends on the lag of technology relative to the world frontier, following the idea of Nelson and Phelps (1966), and also on foreign direct investment. On the one hand, the more backward a country is, the greater the room it has to absorb technology and, thus, the higher its growth rate of technology will be. On the other hand, the higher foreign direct investment is, the higher will be the capacity to close a given technological gap. This assumption on foreign direct investment is also adopted by Findlay (1978) and has received empirical support at the micro level. In the next Section we will discuss the related literature. The stock of foreign direct investment is related to the control of factors of production and management by the firm.1 Countries relying relatively more on foreign direct investment may have higher diffusion of technology. Moreover, FDI may stimulate research in the country and thus improve on its innovation rate. Other forms of foreign capital, such as external debt, do not have these characteristics, or at best have a tenuous direct effect on transfer of technology, when compared with FDI. We use two measures of foreign direct investment. First, the most common in macro growth regressions, the stock of foreign direct investment over GDP. Second, the stock of FDI over total foreign capital, our preferred measure. Both measures of FDI are obtained from the 2009 update of Lane and Milesi-Ferretti (2007). The second measure is related to the first one in a small open economy model, as the international interest rate is equal to the marginal product of physical capital. Using a Cobb–Douglas production function, there is a linear relationship between total physical capital and GDP and, thus, between FDI over GDP and FDI over total physical capital. Taking other factors as given, total capital is equal among economies and it differs only in the composition of foreign capital. The empirical implications of our open-economy growth model are tested using system-generalized method of moments (system-GMM) estimations on a dataset comprising eight consecutive and non-overlapping 5-year periods from 1970 to 2009, and 139 countries. After controlling for initial GDP per capita or initial technology level, investment, initial education,2 population growth, and trade openness, we find that economies with relatively more foreign direct investment have higher catch-up and a higher direct effect on productivity growth and on GDP growth. Our results are robust to (1) restricting the sample to the period 1985–2009, over which financial globalization grew considerably; (2) restricting the sample to the developing countries, to non-OPEC members, or to countries dependent on natural resources related exports; (3) controlling for macroeconomic stability and institutions; (4) considering alternative explanations for catch-up, such as diffusion of technology through human capital, openness to international trade, and financial development; (5) using total factor productivity instead of GDP per capita as the dependent variable; and (6) to using FDI flows rather than stocks. Our results, based on a growth model with a process of diffusion of technology, in which the composition of foreign capital plays a role, show that the gains in terms of annual growth vary between 0.67 percentage points for the average country and 0.91 percentage points for the average developing country. The main contributions of our empirical analysis are the following. First, the inclusion of an interaction term of FDI with a proxy of initial technology is a novel addition to a recent literature on financial openness and productivity growth. This interaction appears as essential to capture the effect of foreign direct investment on the diffusion of technology. Failure to include this interaction term leads to omitted variable bias, which may have been a problem in previous empirical studies that do not find evidence of positive effects of FDI on productivity growth and on GDP growth. In fact, after including the interaction term, we also find evidence of a direct effect of FDI on productivity growth and on GDP growth. Second, our results suggest that the effects of foreign direct investment on growth may be captured by the composition of foreign capital, a measure related to foreign direct investment over GDP as referred to above. Finally, we present evidence that developing countries may gain with financial globalization, both in terms of productivity growth and of GDP growth, when foreign capital takes mainly the form of foreign direct investment. This evidence is consistent with our theoretical model, in the sense that developing countries are farther away from the world's technological frontier, having greater room for catch-up. Given the lack of empirical evidence of positive effects of financial globalization on GDP and productivity growth, it seems particularly worthwhile to point out these results for developing countries. The paper is organized as follows. Section 2 discusses the related literature. Section 3 presents a small open economy growth model with diffusion of technology and its predictions, to motivate our empirical analysis. In Section 4 we describe the dataset and the empirical methodology. The empirical results are discussed in Section 5. Finally, concluding remarks are presented in Section 6.

Using as a guide an open-economy growth model with diffusion of technology, we show that foreign direct investment should affect catch-up, an effect that has not been accounted for in cross-country studies dealing with issues of financial globalization. Furthermore, FDI should also affect growth directly. Our empirical analysis makes three main contributions. First, we show that including foreign direct investment and also its interaction with a proxy of initial technology clearly improves the results. This interaction is a novel addition to the literature on financial openness and productivity growth. It is possible that the failure of previous studies to find robust evidence of the benefits of financial globalization on productivity growth and GDP growth may in part be due to a problem of omitted variable bias, as they do not account for the effects on catch-up. Thus, foreign direct investment appears as a crucial factor for the effects of financial globalization on economic growth. Second, we present robust empirical evidence indicating that economies with a greater share of foreign direct investment in foreign capital have a higher catch-up effect and a higher direct effect on productivity growth and GDP growth. The composition of foreign capital is related to the measure foreign direct investment over GDP, as presented in the model. Third, we would like to point out that our results also apply for developing countries. Taking into account that there is a lack of evidence on the positive effects of financial globalization on productivity growth and GDP growth, particularly for developing countries, this is an interesting result. The results presented in this study have implications that contribute to the policy debate on the benefits of financial globalization. Showing the positive effects of foreign direct investment on economic growth through diffusion of technology, these results support the adoption of policies that would attract this form of foreign capital to developing countries. They also imply that governments should pay close attention to the composition of foreign capital entering their countries. Concretely, more foreign capital may not necessarily be better for diffusion of technology and growth, namely if it consists of relatively more external debt. In order to better reap the benefits of financial globalization, developing countries should attempt to attract more foreign direct investment and increase its weight in their foreign financial liabilities