Introduction

This introduction presents an overview of the key concepts discussed in the subsequent chapters of this book. The book describes the economic growth and foreign investment histories of the respective economies. It introduces the theories of international integration and international production. The book highlights the dynamic effects of the theories of international economic integration. It deals with the pure theory that suggests that economic growth may be stimulated by investment that augments and improves the productivity of national physical resources. The book discusses a hypothesis based on the positive spillover effects of Foreign direct investment (FDI) in the theory of international production which states that growth is a function of FDI and, hence, its spillover effects. It explores basic concepts and foundations of the multiplier methodology, and also presents empirical findings provided by the impact, interim and total multipliers, which describe a change in the endogenous variable that results from a unit impact of the exogenous variable.