FDI Transmission to a Third Developing Country Through the Remittances Channel
Date of Award
Doctor of Philosophy
Dr. Susan Pozo
Dr. C. James Hueng
Dr. Yang Li
This dissertation examines a new variant of the economic growth effect of foreign direct investment (FDI). The study tests whether the economic growth effect of FDI spreads to a third developing country. That third country is not the FDI home country, nor the FDI host country, but rather another labor-exporting country. That country supplies the FDI host country with labor, and in turn, receives remittances inflows from the FDI host country. The research specifically tests the hypothesis that the Egyptian economic growth rate increases due to an increase in FDI inflows to the Gulf Cooperation Council (GCC) countries. Given that Egypt is a basic source of much of the labor used in the GCC, the hypothesis investigates whether an increase in FDI inflows to the GCC would increase Egyptian remittances inflows from the GCC, which would in turn increase the Egyptian economic growth rate.
The hypothesis is split into two successive parts. Using yearly data from 1977 through 2010, the first part tests whether an increase in FDI inflows to the GCC has an effect on Egyptian remittances inflows. The second part tests whether an increase in Egyptian remittances inflows influences the Egyptian economic growth rate. While Egyptian remittances inflows do promote Egyptian economic growth, the study finds that FDI inflows to the GCC are not a determinant of Egyptian remittances inflows.
Sheta, Ibrahim Hamdy, "FDI Transmission to a Third Developing Country Through the Remittances Channel" (2012). Dissertations. 74.