Threshold Effect of Intelligence in the FDI-Growth Nexus

Nurshila Ahmad and Muhammad Daaniyall Abd Rahman and W.N.W. Azman-Saini and Yasmin Bani and Anitha Rosland (2025) Threshold Effect of Intelligence in the FDI-Growth Nexus. Empirical Economics Letters, 24. pp. 1-7. ISSN 1681 8997

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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.

Item Type:	Article
Keyword:	Foreign direct investment, Economic growth, Intelligence, Absorptive Capacity, Threshold regression
Subjects:	H Social Sciences > HD Industries. Land use. Labor > HD28-9999 Industries. Land use. Labor > HD72-88 Economic growth, development, planning H Social Sciences > HG Finance > HG1-9999 Finance > HG4501-6051 Investment, capital formation, speculation > HG4538 Foreign investments
Department:	FACULTY > Labuan Faculty of International Finance
Depositing User:	JUNAINE JASNI -
Date Deposited:	06 Jan 2026 11:36
Last Modified:	06 Jan 2026 11:36
URI:	https://eprints.ums.edu.my/id/eprint/45782

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