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GTAP Resource #4780

"Effect of Foreign Direct Investment on Economic Growth and Other Economic Variables in Costa Rica Using the Global Analysis Project (GTAP) Models"
by Alexandre, Jean-Wilner


It is widely accepted in the literature of Foreign Direct Investment (FDI) that an influx of financial capital from foreign sources may complement domestic financial capital and thereby may play a determinant role in fostering economic development in a particular country. Based on this above-mentioned statement, this investigative scientific project is an attempt to use the Global Trade Analysis Project (GTAP) models, a standard Computable General Equilibrium model (CGE) , to establish the link between FDI in Costa Rica and some specific economic variables such as productivity, income, saving , GDP and welfare. This work is an initial work that will culminate in a comprehensive evaluation of many Latin American countries’ economic performance using GTAP.

This first paper will serve as template to study the rest of the countries in Latin America that will be part of this project. It will be a quantitative experiment to study the effect of an increase or decrease of influx of FDI from the rest of world in Costa Rica. In order to conduct that research, a multi-step methodology is implemented. First, the hypotheses are set by pair of variables that attempt to establish the cause and effect relationship. FDI is always used as the exogenous variable and will determine the value of the following endogenous variables that are used such productivity in GDP, upstream industry, productivity in downstream industry, income, savings and well-being.

Keywords: Foreign direct investment, upstream industry productivity, downstream industry productivity, income, savings and welfare

Resource Details (Export Citation) GTAP Keywords
Category: 2015 Conference Paper
Status: Published
By/In: Presented at the 18th Annual Conference on Global Economic Analysis, Melbourne, Australia
Date: 2015
Created: Alexandre, J. (4/15/2015)
Updated: Alexandre, J. (4/15/2015)
Visits: 1,260
- Foreign direct investment

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