This project will investigate the relationship between FDI, the current account, the trade balance, and economic growth, working out what seems to be important for economic development in the data.
This may seem obvious, but these two phenomena affect the current account in opposite directions (FDI is foreign capital investment which, all else equal, should lead to current account deficits; whereas a trade surplus is associated with a current account surplus).
and are not available to fund domestic consumption. So is FDI good for economic development or not? This has to be an empirical question, as the potential for it to go either way is clear. Successful development stories, e.g. in Poland, Malaysia, and Ireland, often combine FDI with a trade surplus.
FDI, investment by foreign actors in a country’s productive capacity, is usually seen as positive to economic development. However, foreign ownership of a country’s asset base, means that the profits from production in that country flow to their foreign owners,
Inspired by your common weal report, 've set the following suggestion to masters students as a summer project idea that I'd supervise next summer. I'll let you know if I get any good projects out of it 👍
