The relationship between foreign direct investment and economic growth - a qualitative comparative analysis for the member states of the European Union

Abstract

Foreign Direct Investment (FDI) is one of the most important internationalization strategies for multinational and transnational corporations. However, these have also become enormously important for economies within the last decades. In the scientific literature it is often argued that FDI drive economic growth in countries in one way or another. The results in these studies however are twofold. In this master thesis we try to find a relationship between FDI and economic growth within the EU-28 using fuzzy set Qualitative Comparative Analysis (fsQCA) for the very first time with such a topic. Our results show, that FDI lead to economic growth when especially the member states are open to trade and have a low level of state interaction. Our findings apply to the countries of Malta, the Czech Republic, Ireland, Luxemburg, Estonia, the Netherlands and Belgium. For the rest of the EU member states we did not find any results covered by our analysis.