This paper studies the role of trading partner' growth and a domestic import tariff in the possibility of growing through trade. To this purpose, a Ricardian model is developed in which a backward economy seeks to increase its long-run growth rate simply by trading with a faster growing partner....

Literature notes many factors as affecting capital flows, but the effects of these flows over the recipient economies and the overall effect over growth are highly debatable. This study claims that although capital flows may be required for the increase in output, other forces are causing this...

We develop a tractable growth model to study the dynamic macroeconomic effects of multinational production (MP) across countries. In this model, MP is the vehicle of international idea diffusion: when firms produce in a foreign country, they contribute to the local stock of knowledge. We...

This study examines the relationship between foreign direct investment (FDI) and economic growth considering the influence of financial sector development (FSD). We empirically determine the threshold level of three FSD indicators that would ensure the positive association between FDI and growth...

In the current age of trade and financial openness, local economies in developing countries are becoming increasingly exposed to external investments. The objective of the proposed two-sector model with environmental externalities is to provide an insight into the interaction between external...

This paper examines the spillover effect of foreign direct investment (FDI) and determinant of FDI across Indian manufacturing industries. The result, based on two-equation model that allows for the two-way link between labour productivity of locally owned industries and foreign presence provide...

We analyze the quantitative impact of the non-tradable sector and structural change on international capital flows. We argue that the allocation puzzle (Gourinchas and Jeanne (2013)) reflects the difference in the magnitudes rather than the direction of net capital flows predicted by the one...