THE GROWTH EFFECTS OF FDI: CONTRASTING G7 AND BRICS+ ECONOMIES

Apstrakt

This paper examines the heterogeneous growth effects of Foreign Direct Investment (FDI) by conducting a comparative empirical analysis of the G7 and BRICS+ economies. The objective of this research is to quantify and contrast the contribution of FDI to real GDP growth in advanced and emerging economies, thereby identifying the structural drivers behind these divergent outcomes. Using a panel dataset covering the period 2004–2023, the study employs three complementary estimation techniques within the Barro-type conditional convergence framework. The results reveal a clear asymmetry: FDI exerts a strong, positive, and statistically significant growth effect in BRICS+ economies, whereas its impact is statistically insignificant and economically negligible in G7 countries. These findings confirm that the growth benefits of foreign investment are context-dependent and highly sensitive to domestic structural conditions.