Resumen
In the global world, Outward Foreign Direct Investment (OFDI) is one of the most prominent economic development factors for the growth of home and host countries total factor productivity (TFP). OFDI and Trade performances are positively engage in the complementarity or substitutability relationship depending on the country factors advantages and microeconomic and scale of economies in firm and industrial level. This paper attempts to explore the long run relationship between outward foreign direct investment (OFDI) and home country TFP using eight South and East Asian Countries as a case for the period of 1980-2010. In order to promote OFDI-led growth, the home government should prepare the private sector for increasing competition in the era of globalization so that linkages can be forged with Asian countries multinationals, and to facilitate home sourcing for OFDI activities. However, the study reveals the evidence of long run relationship between outward FDI and total factor productivity through the implementation of VAR-based cointegration test using the methodology developed in Johansen(1991, 1995) . There is considerable heterogeneity in the long-run effects of outward FDI on total factor productivity across countries, and which can be explained by cross-country differences in the level of human capital, the level of financial development, and the degree of trade openness which are significantly related to cross-country variations in the domestic productivity effects of outward FDI. Meanwhile, the variables which act as the determinants of growth effects of outward FDI have been discussed about herewith as well as the home country effects of OFDI in developing countries and the role of governmental policies to expand the positive effects of OFDI.