Foreign Direct Investment and Total Factor Productivity: Is There Any Resource Curse? - Modern Economy

ME > Vol.9 No.3, March 2018

Foreign Direct Investment and Total Factor Productivity: Is There Any Resource Curse? ()

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DOI: 10.4236/me.2018.93031 1,377 Downloads 3,512 Views Citations

Author(s)

Patrice Rélouendé Zidouemba^1*, Koffi Elitcha²

Affiliation(s)

¹Rural Development Institute, Nazi Boni University, Bobo-Dioulasso, Burkina Faso.
²United Nations Economic Commission for Africa, Southern Africa Regional Office, Lusaka, Zambia.

ABSTRACT

We examine the effects of an important technology diffusion channel—foreign direct investment (FDI)—on the growth of total factor productivity (TFP) and the role played by natural resources in this relationship. Based on cross-sectional data from 71 developing countries, we found that the net effect of FDI on TFP growth decreases with rents provided by natural resources. This result highlights the phenomenon of the natural resource curse applied to foreign direct investment and the non-linearity of the effect of FDI on the TFP growth.

KEYWORDS

Foreign Direct Investment, Total Factor Productivity, Resource Curse, Developing Countries, Cross-Sectional Analysis

Share and Cite:

Zidouemba, P. and Elitcha, K. (2018) Foreign Direct Investment and Total Factor Productivity: Is There Any Resource Curse?. Modern Economy, 9, 463-483. doi: 10.4236/me.2018.93031.

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