CATCH-UP AND DIRECT FOREIGN INVESTMENTS IN ECONOMIC GROWTH
EKONOMİK BÜYÜMEDE YAKALAMA VE DOĞRUDAN YABANCI YATIRIMLAR

Author : Merter MERT
Number of pages : 425-438

Abstract

The aim of this study is to show the mathematical procedure of the explanation of Abramowitz and Gerschenkron in catching-up process. For this purpose Findlay’s model is taken as a benchmark model. Findlay emphasizes two points. First, direct foreign investments make catch-up process possible by raising productivity. A backward country, should implement a policy that promotes direct foreign investments instead of raising domestic saving rate. Second, a backward country should increase human capital investments while promoting direct foreign investments in order to make returns of the direct foreign investments endogeneous.

Keywords

Economic Growth, Catch-Up, Direct Foreign Investments.

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