Score contribution per author:
α: calibrated so average coauthorship-adjusted count equals average raw count
A three-sector endogenous growth model, is used to study the effects of foreign direct investment (FDI) on the dynamics of urban unemployment, labour income, and capital income as well as national welfare in a Harris-Todaro economy. It is shown that more FDI can affect the economy's dynamics and national welfare positively or negatively. The paper derives conditions as to how the growth rate and welfare effects of FDI relate to the intersectoral mobility of capital, the destination of FDI, the elasticities of substitution, and the factor intensities of the final good production. Copyright 1999 by Blackwell Publishing Ltd.