Montesquieu, extrait des Lettres persanes, lettre 30, Rica au même, à Smyrne, 1721.

[pic 1][pic 2]

Graduation Thesis of Bachelor’s

 Degree

Title:  Foreign Direct Investment Inflows and Economic       Growth in Benin[pic 3]

Name:    MASSAMBA TOIVINO KAIS JUNIOR  [pic 4]

Registration number:    2015D142[pic 5]

Supervisor:   金星 (JIN XING)[pic 6]

School: Zhejiang University of Finance and Economics[pic 7]

Major:     International Trade and Economics[pic 8]

Year:    2015-2019[pic 9]

            04/16/2019[pic 10]

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FOREIGN DIRECT INVESTMENT ON ECONOMIC GROWTH

-The Case of Benin

Abstract: The role of Foreign Direct Investment (FDI) on the growth of countries under developmental transformation is a subject of vast empirical research. In some major research studies, the relationship between FDI and growth is positive although there is no clear understanding of this relationship. Meanwhile, in other research works the relationship is rather negative. So, in short, the relationship between FDI and growth doesn’t appear lucid. Thus, mitigated findings on studies carried out can be applied to different countries based on their individual specific issues or situations that are camouflaging the clarity of the role FDI plays in their growth. This research work is therefore to examine the case of Benin between the period of 1970 and 2005. This period is considered for the research because, taking into account the interdependence of FDI and growth of a country based on previous research works, we chose a model in a form of a simultaneous equation system that is tested by two-Stages Least Square (SLS) method and three-stage least squares (3SLS). This is then used to analyze the impact of the FDI on the growth rate of the real GDP of Benin. We arrive at the conclusion that FDI positively and meaningfully affects the growth rate, and that it is more efficient than domestic investment. In that regard the human capital and the degree of opening-up the economy don’t play a major role as a catalyst for the growth of the country. Since their interaction with FDI has a positive effect but has no major meaningful effect on growth rate of Benin.

Keywords: Foreign Direct Investment; Economic Growth; Co-integration; Benin 

对外经济增长的直接投资
-贝宁局势

摘要(abstract): 外国直接投资（FDI）对发展转型国家增长的作用是一项广泛的实证研究。在一些主要的研究中，虽然对这种关系没有明确的认识，但外国直接投资与增长之间的关系是积极的。同时，在其他研究工作中，这种关系是相当消极的。因此，简而言之，外国直接投资与增长之间的关系似乎并不清晰。因此，对所开展研究的缓解结果可以根据其个别具体问题或情况应用于不同国家，这些问题或情况掩盖了外国直接投资在其增长中所起作用的清晰度。因此，这项研究工作是为了研究1970年至2005年期间贝宁的情况。这一时期被考虑用于研究，因为考虑到外国直接投资的相互依赖性和基于先前研究工作的国家的增长，我们选择了一个模型。以同步方程系统的形式，通过两阶段最小二乘法（SLS）和三阶段最小二乘法（3SLS）进行测试。然后用它来分析外国直接投资对贝宁实际国内生产总值增长率的影响。我们得出结论，外国直接投资积极而有意义地影响增长率，并且它比国内投资更有效率。在这方面，人力资本和经济开放程度并没有起到促进国家增长的重要作用。由于它们与外国直接投资的相互作用具有积极作用，但对贝宁的增长率没有重大影响。

关键词(keywords): 外商直接投资; 经济增长; 协整; 贝宁.

Contents 

1.Introduction ……………………………………………………………………………1

1.2 Objectives of the study ………………………………………………………........2

1.3 Research framework ………………………………………………………....…2

1.4 The contribution of the study …………………………………………………...2

2. Literature review ……………………………………………………………………...3

2.1 Theoretical analysis ……………………………………………………………....5

2.2 Empirical analysis ………………………………………………………………...7

2.2.1 The spillover effect of FDI on the host country ……………………………...10

2.2.2 Effects of FDI on domestic investment: crowding in or crowding out ……...11

2.2.3 Effects on exports and foreign trade ………………………………………...12

2.2.4 Effects of FDI on human capital …………………………………………......14

3.General overview of FDI and growth in Benin ……………………………………....16

3.1 Trend of FDI in Benin …….....................................................................................16

3.2 Sector distribution of FDI flows entering in Benin ……………….…………...17

3.3 Effects of FDI on economic growth in Benin ……………………………………18

4. Method of estimation and presentation of variable …………….……………………22

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