Foreign Direct Investments and Economic Growth

The liberalization of goods and capital flows became a priority policy target with the deepening of globalization in the 1990s. Consequently, foreign direct investments also increased in the developing countries. One of the prominent arguments of the advocates of international direct investments was that these investments could accelerate economic growth. The paper discusses the relationship between foreign direct investment and economic growth focusing on upper middle-income countries. Results indicate that there is no strong relationship between foreign direct investment and economic growth.