Journal Article

Can FDI explain the growth disparity of the BRIC and the non-BRIC countries? : theoretical and empirical evidence from panel growth regressions


The aim of this paper is to explain the growth disparity between the four major emerging economies that are widely known with the acronym BRIC (Brazil, Russia, India, and China) and the non-BRIC countries. There is ample evidence in the literature that FDI is growth enhancing, however there is little discussion whether FDI is the main driving factor of growth disparities between different countries. We utilise a balanced panel dataset for the BRICs and 50 other developing economies from 1980 to 2020. Our findings advocate that foreign direct investments, gross capital formation, human capital, and infrastructure are particularly important for economic growth. However, foreign direct investments, gross capital formation and human capital are observed to be more efficacious in BRICs. Also, the relative significance of foreign direct investments seems to be conditional on the presence of better-quality human capital and higher levels of domestic investments in BRICs, thus explaining the growth disparities.

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Khan, Seefat-E-Rabbi
Asteriou, Dimitrios
Jefferies, Claudia

Oxford Brookes departments

Oxford School of Hospitality Management


Year of publication: 2023
Date of RADAR deposit: 2023-05-11

Creative Commons License This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License

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