Open AccessForeign Capital Inflow, Technology Transfer, and National Income
Author(s) -
Sarbajit Chaudhuri
Publication year - 2001
Publication title -
pakistan development review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.154
H-Index - 26
ISSN - 0030-9729
DOI - 10.30541/v40i1pp.49-56
Subject(s) - inflow , foreign capital , economics , capital (architecture) , welfare , capital outflow , capital intensity , small open economy , labour economics , economic sector , external sector , secondary sector of the economy , capital formation , foreign direct investment , international economics , monetary economics , financial capital , macroeconomics , market economy , economy , monetary policy , human capital , history , physics , archaeology , mechanics
According to Jones and Marjit (1992), in a two-sector,full-employment model it is not possible to show that growth in theforeign capital employed in the export sector of a small open economywill lead to a fall in the welfare in the presence of a protectedimport-competing sector. In this short paper, we have shown that one mayget the immiserising result even in this framework if the inflow offoreign capital into the export sector is accompanied by technologytransfer, which leads to a fall in the labour-output ratio in thissector.