On the welfare effects of foreign investment

• 成果类型: Article
• 署名作者: Reis, AB
• 署名单位: Universidade Nova de Lisboa
• 刊物名称: JOURNAL OF INTERNATIONAL ECONOMICS
• ISSN/ISSBN: 0022-1996
• 发表日期: 2001
• 页码: 411-427
• 关键词: foreign direct investment; endogenous growth; transfer of profits

摘要

Modern growth theory emphasizes endogenous technological change as the engine of growth. A policy implication for developing countries that has been drawn from this theory is that foreign direct investment increases growth. However, welfare assessments must recognize that investment returns may be repatriated. In this paper we show that foreign investment may decrease national welfare due to the transfer of capital returns to foreigners. Taking into account all the relevant effects, we show that welfare does not change monotonously with FDI and we characterize the conditions that imply a positive or a negative welfare effect of foreign investment. (C) 2001 Elsevier Science B.V. All rights reserved.