This study investigates the role of democracy in moderating the growth effect of FDI, the interaction specification is used. Methodologically, this study adopts a dynamic GMM panel estimator which allows us to control problems associated with the country-specific effects, endogeneity and the inclusion of lagged dependent variables. The results illustrate that there is no direct impact of FDI on output growth. However, the findings show that the growth effect of FDI depends on the level of dem...
