The purpose of our empirical investigation is to estimate the effects of FDI on
economic growth, and to investigate the channel through which FDI may be
beneficial for growth. In particular, as discussed in Section 2, we examine whether
FDI interacts with the stock of human capital to affect growth rates. We also test
whether the level of FDI has an effect on the overall level of investment in the
country and on the efficiency of investment.