FDI- Economic Growth Nexus: A Literature review

Conducting a systematic literature review on the topic of FDI and Economic Growth and investigating this relationship, along with the determinants of an economy that attract FDI and the externalities resulting from Foreign activities, it is found that FDI does have a positive effect on a host country’s economic growth but only with the preexistence of certain determinants which facilitate the absorption capacity of the host country on reaping the spillover effects (externalities) of FDI.
Lastly, a framework was built to illustrate the interaction between FDI, Determinants and condition of the host economy, barriers to growth, economic growth and externalities.