Contribution of Tourism and Foreign Direct Investment to Gross Domestic Product: Econometric Analysis in the case of Sri Lanka

2019 ◽  
Vol 118 (8) ◽  
pp. 476-481
Author(s):  
A.M.M. Mustafa
Keyword(s):  
Time Series ◽  
Foreign Direct Investment ◽  
Sri Lanka ◽  
Gross Domestic Product ◽  
Direct Investment ◽  
Granger Causality Test ◽  
Tourism Industry ◽  
Domestic Product ◽  
Causality Test ◽  
Long Run

This study employs time series annual data for the period from 1978 to 2017 to evaluate the contribution of foreign direct investment (FDI) and tourism industry (TR) to Sri Lanka’s Gross Domestic Product (GDP). Sri Lanka’s liberalization and deregulation policies put into effect in 1977 have attracted a huge volume of foreign direct investments into the country. However, the protracted civil war affected the country’s economic base and resulted in poor performance. Recently a more conducive environment has been established after the three decade long ethnic war came to an end. In this context, the Sri Lankan government has taken positive measures to attract foreign direct investment and boost tourism in the country. This study intends to evaluate the contribution of foreign direct investment (FDI) and tourism industry (TR) to the Gross Domestic Product of Sri Lanka, as these two factors are considered to be very effective at increasing the GDP of a country. Unit root test was done on the variables and the method chosen was the Augmented Dicky – Fuller (ADF) test. Co-integration analysis was used for the long run relationship and the Granger causality test was performed to investigate the causal relationship. The empirical study shows that there is a positive and statistically significant relationship between the variable’s TR and FDI to the GDP in the long run. Results of Granger causality test implied that the two-way causality promoted the economic growth of Sri Lanka. E-Views 9 econometrics software was used for the time series data analysis.

scholarly journals Effect of Foreign Direct Investment on Bangladesh Economy: a Time Series Analysis from 1972 to 2013

2020 ◽  
Author(s):  
Rumana Rashid ◽  
Sk. Sharafat Hossen
Keyword(s):  
Economic Growth ◽  
Time Series ◽  
Foreign Direct Investment ◽  
Granger Causality ◽  
Direct Investment ◽  
Export Performance ◽  
Granger Causality Test ◽  
Causality Test ◽  
Long Run ◽  
The Impact

This study investigates the impact of Foreign Direct Investment (FDI) on economic growth and examines the causality between FDI and economic growth in Bangladesh during 1972-2013. Gross Domestic Product (GDP), export performance (EXP), Foreign Direct Investment (FDI), and Gross Fixed Capital Formation (GFCF) are considered to capture the objective of the study. The study methodology includes some systematic steps. As the data used in the study is time-series in nature, the author employs unit root tests, and in this case, Augmented Dickey-Fuller (ADF) and Phillips-Perron (PP) tests are used. Then Johansen’s cointegration test, Granger causality test, regression with Newey-West Standard Error and Vector Error Correction Model (VECM) are applied. By using the ADF and PP test the study reveals that the variables of four-time series are integrated of I (1) i.e. they are stationary at first difference. Regression analysis result demonstrates that FDI has a positive effect on economic growth. The Granger Causality test discloses that there is a unidirectional relationship between FDI and economic growth. But the VECM estimation finds that in the long run FDI negatively affects economic growth.

scholarly journals Globalisation and Economic Growth in West Africa

2021 ◽  
Author(s):  
Benjamin Wanger ◽  
Osman Nuri Aras
Keyword(s):  
Foreign Direct Investment ◽  
West Africa ◽  
Gross Domestic Product ◽  
Least Squares ◽  
Direct Investment ◽  
Ordinary Least Squares ◽  
Domestic Product ◽  
African Countries ◽  
Causality Test ◽  
Long Run

Abstract Economic integration among countries could be beneficial to trading partners if properly handled through appropriate regulation of production, distribution, and consumption. However, it appears developing countries often do not benefit from their relations with other countries at advanced stages of developed. It is in view of this that this research was conducted with concentration on West Africa. Panel Cointegration techniques including Fully Modified Ordinary Least Squares, Dynamic Ordinary Least Squares and Dumitrescu-Hurlin Panel Causality Test were applied using time series on Gross Domestic Product, Exports, Imports and Foreign Direct Investment of eight West African countries from 1960 – 2019. while a positive and significant long run causal relationship was found between Exports, Imports as aspects of globalisation and Gross Domestic Product, there was an observed negative long run relationship between Foreign Direct Investment and Gross Domestic Product. Export promotion, hight import tariffs, the local content initiative, liberal migration policies and strong regulatory machinery were recommended.JEL Codes: FGHO

The relationship between energy consumption and gross domestic product in Hong Kong (1992–2015): Evidence from sectoral analysis and implications on future energy policy

2019 ◽  
Vol 31 (2) ◽  
pp. 215-236
Author(s):  
Ruixiaoxiao Zhang ◽  
Geoffrey QP Shen ◽  
Meng Ni ◽  
Johnny Wong
Keyword(s):  
Time Series ◽  
Energy Consumption ◽  
Gross Domestic Product ◽  
Causal Relationship ◽  
Granger Causality ◽  
Value Added ◽  
Granger Causality Test ◽  
Domestic Product ◽  
Causality Test ◽  
Per Capita

The causal relationship between energy consumption and gross domestic product in Hong Kong from 1992 to 2015 is investigated in this study. Different from the previous studies focusing on the causal relationship between total energy consumption and total gross domestic product per capita, this study further investigates the causal relationship from sectoral perspective, including residential, commercial, industrial and transportation sectors. For each sector, the time series data of sectoral energy consumption and sectoral per capita value added are collected. To conduct the Granger causality test, the unit root test is first applied to analyse the stationarity of time series. The cointegration test is then employed to examine whether causal relationship exists in long-term. Finally, based on the aforementioned tests, both vector error correction model and vector autoregression model can be selected to determine the Granger causality between time series. It is interesting to find that the sectoral energy consumption and corresponding sectoral per capita value-added exhibit quite different causal relationships. For both residential sector and commercial sectors, a unidirectional causal relationship is found running from the sectoral per capita value added to sectoral energy consumption. Oppositely, for industrial sector and transportation sector, a unidirectional causal relationship is found running from sectoral energy consumption to sectoral per capita value added. Regarding the Granger causality test results, the indicative suggestions on energy conservation policies, energy efficiency policies and greenhouse gas emission reduction policies are discussed based on the background of Hong Kong’s economic structure and fuel types.

The Causal Links Between Foreign Direct Investment And Economic Growth In Pakistan

2012 ◽  
Vol 6 ◽  
Author(s):  
Najid Ahmad ◽  
Muhammad Farhat Hayat ◽  
Muhammad Luqman ◽  
Shafqat Ullah
Keyword(s):  
Economic Growth ◽  
Foreign Direct Investment ◽  
Gross Domestic Product ◽  
Direct Investment ◽  
Domestic Product ◽  
Correction Model ◽  
Economic Progress ◽  
Long Run ◽  
Domestic Capital ◽  
The Relationship

This paper investigates the relationship between foreign direct investment and economic growth in Pakistan. The co-integration and error correction model is used to show the relationship between foreign direct investment and gross domestic product in Pakistan. Gross domestic product is taken as dependent variable while foreign direct investment, labor force and domestic capital as independent variables. The results suggest that there is a positive relation between foreign direct investment and gross domestic product in short as well as long run. If we want to make economic progress then there is a need to invite foreign investors because foreign direct investment increases GDP that is economic growth.

scholarly journals Investigating the Relationship between Unemployment and Inflation in Nigeria

2021 ◽  
Vol 04 (03) ◽  
Author(s):  
Charity I. Anoke I. Anoke ◽  
Keyword(s):  
Foreign Direct Investment ◽  
Granger Causality ◽  
Direct Investment ◽  
Economic Status ◽  
Government Expenditure ◽  
Negative Relationship ◽  
Granger Causality Test ◽  
Causality Test ◽  
Long Run ◽  
The Impact

This study considered the impact of inflation on unemployment in Nigeria viz avis selected macroeconomic variables. The researcher adopted co integration, vector error correction model and VEC Granger causality test econometric procedure in the analysis of the data employed. The specific objectives of the study are; (i) to determine the extent to which inflation impact on unemployment in Nigeria within the period of study, (ii) to examine if government expenditure have any significant impact on unemployment in Nigeria within the period of study, (iii) to estimate the significant impact of foreign direct investment on unemployment in Nigeria within the period of study; (iv) to investigate the extent of direction of causality between unemployment and inflation in Nigeria within the period of study. The results of the research revealed long run relationship among estimated variables, VECM result showed a positive significant relationship between inflation and unemployment in the short run and long run, government expenditure and foreign direct investment maintained negative relationship with unemployment both in the short and long run. The VEC Granger causality test indicated causality among UNEM, INF and TGEX. The research recommended that (i) government should focus on policy and strategy that can attract foreign direct investment into the country, (ii) government should try to maintain low inflation rate through suitable monetary policy; (iii) government should encourage investment platforms and enabling environment for effective and efficient national output; and (iv) Government should consciously increase fiscal space for capital activities and projects that are capable of generating income, increase domestic and public spending, improve economic status and reduce unemployment. This paper concluded that the Philip’s curve hypothesis does not apply in Nigeria within the period of study as the result failed to establish an inverse relationship as postulated by A.W. Philips.

scholarly journals Impact of Foreign Direct Investment on Economic Growth of Nepal

2019 ◽  
Vol 33 (2) ◽  
pp. 73-80
Author(s):  
Shiva Prasad Pokharel ◽  
Bishnu Prasad Pokharel
Keyword(s):  
Economic Growth ◽  
Foreign Direct Investment ◽  
Gross Domestic Product ◽  
Granger Causality ◽  
Unit Root ◽  
Direct Investment ◽  
Unit Root Test ◽  
Granger Causality Test ◽  
Capital Formation ◽  
Causality Test

 This paper aims to investigate the impact of Foreign Direct Investment (FDI) on the economic growth of Nepal for the period 2008/09 to 2017/18 A.D. yearly data. It evaluated the Gross Domestic Product (GDP) performance and the trends of FDI and Gross Fix Capital Formation (GFCF) in Nepal. To demonstrate the relationship between Nepalese Gross Domestic Product (GDP) and Foreign Direct Investment (FDI) and Gross Fix Capital Formation (GFCF) Multiple-Regression-Model has been applied along with various econometrics techniques such as Unit-Root Test, Granger-Causality Test and Ordinary Least Square (OLS). GDP in this model is used as dependent variable whereas FDI and GFCF are measured as independent variables. According to the results, Unit Root Test indicated that all the variables included in the model were not stationary at level except FDI, whereas GDP and GFCF are stationary at first difference. The model is overall significant with the positive and significant relationship of GDP, FDI and GFCF. Result also indicate a good fit for the model with R2=86%. The Granger Causality Test revealed that there was no causality between the variables since all p-value obtained are more than 5%. Based on the empirical result of this paper, policy recommendation proposed that for Nepal to generate more foreign direct investment, hard work should be made at solving problems of government involvement in business; relative closed economy; corruption; weak public institutions; and poor external image, and political instability.

scholarly journals Determinants of Pakistan’s Exports: An Econometric Analysis

2018 ◽  
Vol 21 (3) ◽  
pp. 95-108
Author(s):  
Arshad Ullah Jadoon ◽  
Yangda Guang ◽  
Anwar Ahmad ◽  
Sajad Ali
Keyword(s):  
Foreign Direct Investment ◽  
Gross Domestic Product ◽  
Direct Investment ◽  
Time Series Data ◽  
Domestic Product ◽  
Series Data ◽  
Employment Level ◽  
Consumption Expenditures ◽  
Long Run ◽  
The Government

The research investigated the determinants of Pakistan’s exports by using time series data from 1990–2016. Certain econometric tests were also applied to check cointegration among variables. A unit root test was used to check the stationarity of selected variables. After the stationarity of the data, a vector error correction model is used to estimate the effect of regressors, like foreign direct investment, gross domestic product, employment level, and consumption expenditures on a dependent variable, i.e. exports in the short run. The result shows the positive relationships that foreign direct investment, gross domestic product and employment level have on exports, and the adverse impact of consumption expenditures on the dependent variable. The study uses Johansen’s cointegration test for the long run. The results show that all the variables are co‑integrated in the long run. It is suggested that the government should encourage foreign direct investment and gross domestic product, which would help accelerate Pakistan’s exports. It is also suggested that whenever policymakers provide a trade policy, in particular, in relation to exports, then the adverse effect of exchange rate depreciation, external debt burdens, taxes, sanctions and protectionism should be quantified, and necessary measures be suggested so as to minimize any repercussions.

Exploration of Relationship between FDI and GDP: A Comparison between India and Its Neighbouring Countries

2018 ◽  
Vol 21 (2) ◽  
pp. 473-489 ◽  
Author(s):  
Pooja Sengupta ◽  
Roma Puri
Keyword(s):  
Economic Growth ◽  
Foreign Direct Investment ◽  
Sri Lanka ◽  
Gross Domestic Product ◽  
Direct Investment ◽  
Indian Subcontinent ◽  
Domestic Product ◽  
Economic Policies ◽  
Fdi Inflows ◽  
The Difference

Foreign direct investment (FDI) inflows have been a trigger for accelerating economic growth in a number of countries. The pattern of FDI flows into India and its neighbourhood has been varied and so has been its impact on the economic growth in each of the countries. Although a lot of research has been carried out to establish causality between FDI and economic growth, the results are sometimes varied and conflicting. This study attempted to study the pattern of FDI into the Indian subcontinent and India’s neighbours, such as Pakistan, Nepal, Bangladesh and Sri Lanka, and explore the causality between FDI and gross domestic product (GDP). The results showed that the different economic policies of the respective countries had a role to play in explaining the difference in the quantum of the flow and there is an association between FDI and GDP, and in all the cases, FDI is instrumental in enhancing the economic growth of the countries included in the study.

scholarly journals MACROECONOMIC INDICATORS AND FOREIGN DIRECT INVESTMENT IN INDONESIA

2021 ◽  
Vol 10 (1) ◽  
pp. 91
Author(s):  
Fitriyah Fitriyah ◽  
Farida Rahmawati ◽  
Bagus Shandy Narmaditya
Keyword(s):  
Time Series ◽  
Foreign Direct Investment ◽  
Gross Domestic Product ◽  
Direct Investment ◽  
Least Square ◽  
Domestic Product ◽  
Ordinary Least Square ◽  
Doing Business ◽  
Macroeconomic Indicators ◽  
Ease Of Doing Business

ABSTRACTIndonesia has abundant diversity of resources to promote economic growth, and insufficient capital will lead to economic stagnation. This paper aims at examining the impact of macroeconomic indicators such as gross domestic product and inflation toward foreign direct investment in Indonesia as well as investigating the ease of doing business factors in explaining foreign direct investment. This research involved a time-series from 2014 to 2019, which was collected from several official websites of Statistics Indonesia (BPS), Central Bank of Indonesia (BI), the Investment Coordinating Board (BKPM), and World Bank. Furthermore, the data were analyzed undergoing multiple linear regression analyses with the Ordinary Least Square (OLS) model. The findings indicate that gross domestic product has a positive impact on foreign direct investment, while inflation has a negative effect. Also, the ease of doing business variables failed in explaining a significant influence between foreign direct investment in Indonesia.ABSTRAKIndonesia memiliki keanekaragaman sumber daya yang melimpah untuk mendorong pertumbuhan ekonomi namun permasalahan permodalan menyebabkan kelambanan yang menyebabkan stagnasi ekonomi. Penelitian ini bertujuan untuk menguji pengaruh indikator makroekonomi seperti produk domestik bruto dan inflasi terhadap investasi asing langsung di Indonesia. Penelitian ini juga menyelidiki faktor-faktor kemudahan berbisnis dalam menjelaskan investasi asing langsung. Data penelitian ini adalah time-series 2014-2019, yang diperoleh dari beberapa situs resmi termasuk Badan Pusat Statistik (BPS), Bank Sentral Indonesia (BI), Badan Koordinasi Penanaman Modal (BKPM), dan Bank Dunia. Selanjutnya data tersebut dianalisis dengan menggunakan analisis regresi linier berganda dengan model Ordinary Least Square (OLS). Hasil penelitian menunjukkan bahwa produk domestik bruto berpengaruh positif terhadap investasi asing langsung, sedangkan inflasi berpengaruh negatif. Selain itu, variabel kemudahan berbisnis gagal menjelaskan pengaruh yang signifikan antara investasi asing langsung di Indonesia.

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