International Journal of Small Economies

SEETANAH BOOPEN, ROJID SAWKUT AND RAMESSUR SHALINI
Vol. 01, No. 01, Year 2009, Pages 24-37, Accepted 1st November 2008.

ABSTRACT
Using a uniquely generated data series of disaggregated capital stock and accounting for endogeneity and feedback issues in a VECM framework, this paper investigates the impact of foreign direct investment (FDI) on the economic growth of Mauritius for 1960–2004. The results show that FDI has indeed been an important ingredient in the economic growth of the country both in the short and long run. Interestingly, FDI is seen to have been more productive as compared with domestic private capital and public capital stock of the country. The study further confirms the presence of important endogenous relationship in FDI-growth link. FDI is not only seen to lead growth but to follow growth as well and is consistent with the „market seeking‟ hypothesis. Deeper analysis reveals that FDI has a crowding in effect on domestic private capital accumulation and indicates thus the presence of indirect effects on growth.

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A Dynamic Empirical Investigation of Foreign Direct Investment and Growth for the case of Mauritius
SEETANAH BOOPEN, ROJID SAWKUT AND RAMESSUR SHALINI
Vol. 01, No. 01, Year 2009, Pages 24-37, Accepted 1st November 2008.