The regressions in Table 4 are related to the effect of foreign investment in the manufacturing
sector on growth. FDI in the manufacturing sector is shown to have a positive and significant
effect on growth. Columns (1) through (5) show FDI to have a positive effect after controlling for
initial income, macroeconomic instability (proxied through inflation), financial development,
investment, and institutional quality. All regressions reported in Table 4 find the coefficients on
FDI to range from 0.7 to 1.6 according to the different sets of control variables. Our main finding
– the positive significance of FDI inflows to the manufacturing sector – seems to corroborate the
notion that FDI plays a positive role for FDI in generating economic growth, but these effects
seem to emerge from foreign investment in the manufacturing sector.