Relationship between foreign direct investment stock and foreign portfolio investment stock. Do they really matter for GDP in Poland, Germany, and Great Britain?

• Authors: Juan Kania-Morales , Robert Mróz
• Languages of publication: EN

Abstracts

EN

In this paper we discuss and investigate mutual relationship between FDI and FPI stocks in 3 countries. The standard theoretical economic paradigm sharply differentiates between the two, treating them rather as substitutes from foreign investor’s perspective. Yet, some recent empirical attempts reveal that there are important similarities in their determinants and thus suggest their complementarity. Furthermore, we contribute by assessing FDI & FPI stocks’ impact on real GDPs. In this paper we present estimates of vector error correction (VEC) models’ parameters for three countries, in various settings. We find a number of interesting points – in case of Poland there seem to exist some significant long-run dependences between real GDP and stocks of FDI and FPI, which to some extent stands in opposition to inferences derived from analogical models constructed for two well-developed countries, the United Kingdom and Germany.

Keywords

EN

foreign direct investment; foreign portfolio investment; economic growth

• Publisher: Wydział Nauk Ekonomicznych Uniwersytetu Warszawskiego
• Journal: Ekonomia. Rynek, Gospodarka, Społeczeństwo
• Year: 2014
• Issue: 38
• Pages: 97-126

Contributors

author

Juan Kania-Morales

• Faculty of Economic Sciences, Faculty of Mathematics, University of Warsaw

author

Robert Mróz

• Faculty of Economic Sciences, College of Inter-Faculty Individual Studies in Humanities, University of Warsaw