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Foreign capital, technology and economic growth

Publication Type : Journal Article

Publisher : Mokhtar M Metwally

Source : The Middle East Business and Economic Review, Mokhtar M Metwally, Volume 18, Number 2, p.54-69 (2006)

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Campus : Amritapuri

School : School of Business, School of Economics

Center : Amrita Center for Economics & Governance (ACEG)

Department : Department of Economics

Year : 2006

Abstract : Within the framework of the neoclassical growth model, this paper shows that the foreign capital inflow can improve economic conditions in the host country on a permanent basis if the fraction of foreign capital income reinvested in the host country is sufficiently greater than the saving rate of the host country. As long as the latter condition is satisfied, there exists a unique steady state equilibrium, which is asymptotically stable, and the new technology and knowledge that accompany foreign investment have a positive effect on both the steady state capital-labor ratio and the steady state proportion of foreign capital in the aggregate (economy) capital.

Cite this Research Publication :
C. Nghe Truong and Dr. Satya Paul, “Foreign capital, technology and economic growth”, The Middle East Business and Economic Review, vol. 18, pp. 54-69, 2006.

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