Does Foreign Direct Investment always Generate Economic Growth? Evidence from the Panel Quantile Regression Model

This paper concentrates on the impact of foreign direct investment (FDI) on economic growth at different levels of country income. This study was conducted based on 79countries in four income groups (31 High income, 18 Lower middle income, 21 Upper middle-income, and 9 Low-income countries) for the period 1990-2019. Our estimates use quantitative panel regression techniques. The results of this paper 'show that the impact of FDI on economic growth changes with a country's growth level. The empirical results show that in countries with high income, medium-upper income levels, the influence of FDI on economic growth is always positive. Of course, there is a negative relationship between FDI and economic growth in the lower-income and the 30th percentile in medium-lower income. We obtained evidence that the growth effect of FDI is conditional upon the level of income and growth in host countries. The impact of FDI on economic growth depends on the countries income level. FDI is particularly suitable for economic growth in countries with higher GDP growth. In countries with medium-upper income levels, the influence of FDI on economic growth is greater than other income groups.