Panel Data Analysis of Foreign Direct Investment and Poverty from the Perspective of Developing Countries

Abstract

The purpose of this paper is to assess the relationship between foreign direct investment (FDI) and poverty at the macro-pathway in selected developing countries. The contribution to host countries from FDI can take several forms such as the transfer of technology human capital development increased competition in domestic markets and the generation of corporate tax revenues among others. The paper develops a data set and an econometric model to analyse FDI flows and poverty relations at the macro level panel data set. Results show that there is statistically significant relationship between FDI and poverty and it is obvious that FDI reduces poverty in selected developing countries. (C) 2014 The Authors. Published by Elsevier Ltd. Selection and peer review under responsibility of Organizing Committee of BEM 2013.