Enough foreign direct investment quickens economic growth everywhere

It has proved hard to find evidence of a stable and important role for FDI promoting economic growth and helping poor countries catch up to rich ones. This is likely because FDI effectiveness depends on context, which the nearly universal linear empirical growth model obscures. // We use a partially non-linear model to discover an FDI threshold, below which FDI has no effect on growth, but above which it has a strong and substantial effect. We also discover that there is no starting-income threshold for FDI effectiveness. Rather, poorer countries benefit more from FDI. // We learn too that FDI helps poor countries catch up to rich ones, and is sometimes necessary for it. Nearly all countries with sufficient FDI, poor and rich, are converging in income. However, among countries without sufficient FDI, there is a convergence threshold. Those with a high enough starting income are converging, while the poorer ones are not