Can a country grow faster by saving more? We address this question both theoretically and empirically. In our model, growth results from innovations that allow local sectors to catch up with the frontier technology. In relatively poor countries, catching up with the frontier requires the...

We investigate the causal links between human capital, openness through trade and FDI, and economic growth using quarterly data for Thailand over the period 1973:2-2000:4. A number of hypotheses are investigated including, in particular, FDI-led growth and export-led growth, as well as the...

The empirical experience of countries hit by brain drain shows no clear impact of human capital outflow on the source economy. This study shows that by triggering the capital flows from abroad, the brain can be beneficial for the sending countries. The theoretical claim about the causal effect...

Exporting and FDI have traditionally been two major firm-level responses to globalization. Export outsourcing (EO), a new strategy that gained in importance recently, has now become another alternative. This paper seeks to examine how firms choose between EO and outward FDI by looking into...

We identify the net effect of foreign direct investment (FDI) on the host economy by separating positive productivity (TFP) effects of knowledge spillovers from negative effects of competition. We allow for foreigners selecting into productive firms and sectors. Using a new and unique...

The underlying model analyzes the first time foreign market entry decision of a representative investor who can choose between export and FDI. The model combines the proximity-concentration trade-off framework with the real option methodology and sheds light on the effects of productivity...