If you need an accessible version of this item please contact JSTOR User Support

The Effects of Foreign Direct Investment and Imports on Economic Growth: A Comparative Analysis of Thailand and the Philippines (1970-1998)

Jamshid Damooei and Akbar Tavakoli
The Journal of Developing Areas
Vol. 39, No. 2 (Spring, 2006), pp. 79-100
Stable URL: http://www.jstor.org/stable/4193005
Page Count: 22
  • Download PDF
  • Cite this Item

You are not currently logged in.

Access your personal account or get JSTOR access through your library or other institution:

login

Log in to your personal account or through your institution.

If you need an accessible version of this item please contact JSTOR User Support
The Effects of Foreign Direct Investment and Imports on Economic Growth: A Comparative Analysis of Thailand and the Philippines (1970-1998)
Preview not available

Abstract

The main objective of this paper is to estimate the output elasticity of foreign direct investment (FDI) and imports in Thailand and in the Philippines during the period 1970-1998. Applying a CES generalization of Cobb-Douglas production function, the output response to FDI is the same in both countries, but imports affect Thailand more than the Philippines. The FDI contribution to every one percentage growth point is about 0.05 of a percentage point in each country where imports contribute about 0.47 of a percentage point in Thailand and 0.31 of a percentage point in the Philippines. As a result, the foreign investment and imports contribute about 52 percent of every one percentage growth point in Thailand compared to a lower 36 percent in the Philippines. The remaining effects on the economic growth are from labor and domestic investment. Both countries are labor intensive, but the impact of labor is more significant in the Philippines. The Philippine economy is also more domestic capital intensive than the Thai economy. Furthermore, the FDI path shows that the effect of foreign investment is more pronounced in the Philippines during the second half of the 1990s, whereas the imports are more effective in Thailand since 1994. Therefore, the Philippine economy could gain more from directing its economic policies to further liberalize its foreign investments. The Thai economy, on the other hand, should continue its reliance on imported foreign technology in order to accelerate its economic growth.

Page Thumbnails

  • Thumbnail: Page 
[79]
    [79]
  • Thumbnail: Page 
80
    80
  • Thumbnail: Page 
81
    81
  • Thumbnail: Page 
82
    82
  • Thumbnail: Page 
83
    83
  • Thumbnail: Page 
84
    84
  • Thumbnail: Page 
85
    85
  • Thumbnail: Page 
86
    86
  • Thumbnail: Page 
87
    87
  • Thumbnail: Page 
88
    88
  • Thumbnail: Page 
89
    89
  • Thumbnail: Page 
90
    90
  • Thumbnail: Page 
91
    91
  • Thumbnail: Page 
92
    92
  • Thumbnail: Page 
93
    93
  • Thumbnail: Page 
94
    94
  • Thumbnail: Page 
95
    95
  • Thumbnail: Page 
96
    96
  • Thumbnail: Page 
97
    97
  • Thumbnail: Page 
98
    98
  • Thumbnail: Page 
99
    99
  • Thumbnail: Page 
100
    100