Title: Foreign direct investment and economic growth in Asia: a spatial econometric analysis

Authors: Sayantan Ghosh Dastidar; Alexios Makropoulos

Addresses: Derby Business School, University of Derby, Kedleston Road, Derby, DE22 1GB, UK ' Derby Business School, University of Derby, Kedleston Road, Derby, DE22 1GB, UK

Abstract: The academic literature provides a lively debate on the impact of foreign direct investment (FDI) on economic growth. Several empirical time series and cross-country studies show mixed evidence concerning the role of FDI in the recipient country's growth process. However, the existing research has not accounted for the potential existence of spatial interdependence among countries. We argue that such omission may result in biased estimates. To the best of our knowledge, this paper provides, for the first time, a spatial investigation in this area in the context of 30 Asian countries spanning the period 1996-2019. Our econometric analysis indicates that FDI not only has a robust positive impact on the growth process of the host country but also exerts a positive spillover effect on the growth of the neighbouring countries.

Keywords: Asia; economic growth; FDI; foreign direct investment; spatial analysis; spillover effects; emerging markets.

DOI: 10.1504/JGBA.2023.146399

Journal for Global Business Advancement, 2023 Vol.16 No.6, pp.890 - 909

Received: 02 Jan 2024
Accepted: 07 Nov 2024
Published online: 28 May 2025 *

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