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Threshold Effect of Intelligence in the FDI-Growth Nexus

Year: 2025

Type: article

Abstract: : This paper examines whether there is a threshold effect of intelligence in the relationship between FDI and economic growth. It proposes that only countries with a sufficiently high level of intelligence can gain from FDI inflows. To test this, the study uses data from 85 countries covering the period 1976–2018. A threshold regression model is applied to capture the non-linear impact of FDI on growth. The results show that FDI contributes positively to growth only after a country reaches a certain level of intelligence. Below this threshold, FDI has no significant effect on growth. Keywords: Foreign direct investment; Economic growth; Intelligence; Absorptive Capacity; Threshold regression JEL Classification Number: F21; J24; O15; O47

Source: UMS Institutional Repository (Universiti Malaysia Sabah)

DOI: 10.5281/zenodo.17165547

Authors: Nurshila Ahmad, Muhammad Daaniyall Abd Rahman, W.N.W. Azman-Saini, Yasmin Bani, Anitha Rosland

Institutions: Universiti of Malaysia Sabah, Universiti Putra Malaysia

Language: English

Topic: International Business and FDI

Subfield: Strategy and Management

Field: Business, Management and Accounting

Domain: Social Sciences

SDGs: Industry, innovation and infrastructure, Decent work and economic growth

Open Access status: green

OpenAlex ID: W7082351812