scholarly journals Sector Level Analysis of FDI-Growth Nexus: A Case Study of Pakistan.

2009 ◽  
Vol 48 (4II) ◽  
pp. 875-882 ◽  
Author(s):  
Somia Iram ◽  
Muhammad Nishat
Keyword(s):  
Economic Growth ◽  
Foreign Direct Investment ◽  
Direct Investment ◽  
Service Sector ◽  
Manufacturing Sector ◽  
Correction Method ◽  
Jel Classification ◽  
Distributed Lag ◽  
Distributed Lag Model ◽  
Long Run

The main objective of the study is to empirically investigate the differential impact of services and manufacturing Foreign Direct Investment (FDI) on economic growth over the period of 1972 to 2008. The study further examines the role of FDI in presence of macroeconomic instability and privatisation. For the investigation of long run, Autoregressive distributed lag model (ARDL) has been used. For short run results, we used Error correction method (ECM). Our empirical results show that FDI inflow in both, service sector as well as manufacturing is contributing to economic growth positively. But it is apparent from the results that contribution of services FDI to growth is greater than that of manufacturing FDI to growth. Furthermore, the results provide coherent and sound policy recommendations for further policy adaptation regarding sectors. JEL classification: F23, F36, F43, C32 Keywords: Foreign Direct Investment, Economic Growth, Manufacturing Sector, Service Sector, Co-integration

Foreign Direct Investment and Growth Nexus: Further Evidence from Africa’s Largest Economy

2021 ◽  
Vol 13 (1) ◽  
pp. 65-78
Author(s):  
Anthony Orji ◽  
Godson Umunna Nwagu ◽  
Jonathan E. Ogbuabor ◽  
Onyinye I. Anthony-Orji
Keyword(s):  
Economic Growth ◽  
Foreign Direct Investment ◽  
Direct Investment ◽  
Labour Force ◽  
Jel Classification ◽  
Least Square ◽  
Ordinary Least Square ◽  
Distributed Lag ◽  
Autoregressive Distributed Lag ◽  
Long Run

The study investigated the effect of foreign direct investment (FDI) on economic growth in Nigeria, which is currently Africa’s largest economy, and also determined the long-run relationship between FDI and economic growth in Nigeria from 1981 to 2017. The study adopted the autoregressive distributed lag modelling approach and ordinary least square in the analysis. The empirical results revealed that FDI has a positive and significant relationship with economic growth in Nigeria within the period under review. The study concluded and recommended that Nigerian Government should formulate policies that will attract more FDI in all sectors of the economy especially in the service and manufacturing sectors, so as to improve the infrastructural facilities and production of goods in the country and also expand its labour force. Finally, there is need to improve the educational policy of the country in order to raise the stock of human capital in the country that will make useful policies for the attraction for productive FDIs in the country. JEL Classification: E22, F21, F23, F43

scholarly journals Does Foreign Direct Investment Generate Long-Term Growth in Ghana?

2021 ◽  
Vol 9 (3) ◽  
pp. 214-229
Author(s):  
Arthur Benedict ◽  
Kyei Baffour Tutu ◽  
Afenya Millicent Salase
Keyword(s):  
Economic Growth ◽  
Foreign Direct Investment ◽  
Direct Investment ◽  
Policy Reforms ◽  
Foreign Investors ◽  
Distributed Lag ◽  
Distributed Lag Model ◽  
Long Run ◽  
Lag Model ◽  
The Government

In pursuant to sustainable economic growth on the ticket of FDI-led growth hypothesis, the government of Ghana has instituted a myriad of thoughtful policy reforms to help boost the economy to realize a self-sustaining economic growth. To some extent, the policies might have paid off as the country was named the highest recipient of FDI in West Africa in 2018. However, the supposed upsurge in the inflow of foreign direct investment in the country and its expected long-run spillover benefits have not been tangibly felt in the region as the economy continues to oscillate. Therefore, this study utilized two methods; the autoregressive distributed lag model (ARDL) and the variance decomposition method (VDM) to empirically examine economic growth of Ghana as a function of foreign direct investment (FDI) whiles controlling for exchange rate, financial development, trade oppeness and employment rate. The results of the study endorses the FDI-led growth for Ghana by indicating that a positive long run causal impact flows from FDI to economic growth. The findings from the VDM test affirm the results are robust and reliable. Therefore, the study suggests that government should amplify FDI inflow via policies like incentives to draw more foreign investors directly into other sectors other than the conventional sectors gratified by foreign investors.

Transport Infrastructure and Economic Growth: New Evidence from Tunisia an ARDL Bounds Testing Approach

2017 ◽  
Vol 9 (2) ◽  
pp. 98-112
Author(s):  
Radhia Amairia ◽  
Bouzid Amaira
Keyword(s):  
Economic Growth ◽  
Jel Classification ◽  
Transport Infrastructure ◽  
Annual Data ◽  
Positive Contribution ◽  
Bounds Testing ◽  
Distributed Lag ◽  
Distributed Lag Model ◽  
Long Run ◽  
Lag Model

The achievement of an effective infrastructure, reliable and fair, is essential for economic growth. Indeed, the transport infrastructure is essential to the prosperity of regions. To investigate the relationship between transport infrastructure and economic growth, we use the autoregressive distributed lag model (ARDL), we find that transport infrastructure is cointegrated with economic performance, indicating the affirmed presence of long-run equilibrium relationships among them. We use annual data for the period from 1980 to 2013. The study found that the transport infrastructure and investment in transport infrastructure in Tunisia have a significant positive contribution to growth, which shows that each impact is strong and statistically significant. The Tunisian experience suggests that it is necessary to design an economic policy that will improve the transport infrastructure and to increase investment made to the sector for sustainable economic growth in Tunisia. It is necessary to improve the existing road and rail networks. JEL Classification: F63, L91, R41

scholarly journals The Nexus of Selected Macroeconomic Variables toward Foreign Direct Investment: Evidence from Indonesia

2021 ◽  
pp. 110-115
Author(s):  
Noris Fatilla Ismail ◽  
Suraya Ismail
Keyword(s):  
Economic Growth ◽  
Developing Countries ◽  
Foreign Direct Investment ◽  
Direct Investment ◽  
Domestic Investment ◽  
Fdi Inflows ◽  
Macroeconomic Variables ◽  
Distributed Lag ◽  
Long Run ◽  
Macroeconomic Stability

Foreign direct investment (FDI) inflows are a major instrument of economic growth in developing countries. Indonesia is one of the developing countries that has received more FDI with macroeconomic stability. The macroeconomic stability indicator is seen as an important factor in driving economic growth and attracting FDI inflows in Indonesia. Therefore, this study examines the relationship of selected macroeconomic variables toward the FDI in Indonesia over the period 1980-2019. Using Autoregressive Distributed Lag (ARDL), the empirical results showed that market size, domestic investment, government spending and foreign exchange rate are key factors influencing long-run FDI inflows. However, financial development revealed no relationship with FDI inflows in Indonesia. Overall findings indicated that macroeconomic variables influence FDI inflows. These findings guided policymakers in formulating new policies to ensure macroeconomic indicators' stability in driving economic growth.

scholarly journals GROWTH EFFECTS OF FOREIGN DIRECT INVESTMENT AND FINANCIAL DEEPENING IN NIGERIA (1981-2018)

2020 ◽  
Vol 10 (4) ◽  
pp. 49-67
Author(s):  
Gbenga F. BABARINDE ◽  
Keyword(s):  
Economic Growth ◽  
Foreign Direct Investment ◽  
Direct Investment ◽  
Financial Deepening ◽  
Causality Test ◽  
Growth Effects ◽  
Distributed Lag ◽  
Long Run ◽  
Short Run ◽  
Money Velocity

This study investigates growth effects of foreign direct investment and financial deepening in Nigeria for the period 1981-2018. Data employed for this study were obtained from Central Bank of Nigeria Statistical Bulletin and World Development Indicators. Pairwise granger causality test and autoregressive distributed lag (ARDL) model were employed in the data analysis. Empirical results show that foreign direct investment (FDI) has positive significant effect on economic growth (GDP) in Nigeria both in the long and short runs. Financial deepening measured as broad money supply as a ratio of GDP (broad money velocity) has positive significant effect on GDP in Nigeria in the long run but the position is reversed to negative non-significant in the short run. In the long run, financial deepening indicator-credit to private sector as a ratio of GDP-, has negative non-significant effect on GDP in Nigeria while its influence is absent in the short run model. Findings also reveal a unidirectional causality from FDI to GDP. Likewise, unidirectional causality flows from GDP to each of the two financial deepening indicators, thus lending credence to the demand-following hypothesis. This study concludes that foreign direct investment and financial deepening have positive growth effects in Nigeria with causality flowing from foreign direct investment to economic growth and the latter granger-causing financial deepening in Nigeria. To boost economic growth, there is a need for Nigeria’s government to further develop the financial system and implement policies to stimulate FDI inflows to the country.

scholarly journals Are Technological Innovation and Foreign Direct Investment a Way to Boost Economic Growth? An Egyptian Case Study Using the Autoregressive Distributed Lag (ARDL) Model

2021 ◽  
Vol 13 (6) ◽  
pp. 3265
Author(s):  
Maha Mohamed Alsebai Mohamed ◽  
Pingfeng Liu ◽  
Guihua Nie
Keyword(s):  
Economic Growth ◽  
Foreign Direct Investment ◽  
Technological Innovation ◽  
Direct Investment ◽  
Distributed Lag ◽  
Distributed Lag Model ◽  
Autoregressive Distributed Lag ◽  
Integration Test ◽  
Lag Model

Both technological innovation and foreign direct investment have received widespread attention in the literature on their role in promoting economic growth. Therefore, this study aims to test the relationship between foreign direct investment, technological innovation, and economic growth of the Egyptian economy during the period between 1990–2019 using the autoregressive distributed lag model simultaneous integration test. Our findings show of the ARDL (Autoregressive Distributed Lag) model estimation a joint complementary relationship between the rate of growth of per capita gross domestic product (GDP) in US dollars and the independent variables in the model in the long and short term, which are statistically significant results. We found a positive significant relationship between the variables of incoming foreign direct investment and share of total capital formation in economic growth. Therefore, in the long term, the rate of inflation and the innovation index had a negative impact in the long term and the speed of adjustment towards equilibrium was very large, as it was estimated at 1.5 years (1/0.651). Furthermore, the study also provides valuable lessons and a strategic vision for the Egyptian government, which aspires to advance technology and attract more foreign direct investment.

scholarly journals Causal Links between Trade Openness and Foreign Direct Investment in Romania

2021 ◽  
Vol 14 (3) ◽  
pp. 90
Author(s):  
Malsha Mayoshi Rathnayaka Mudiyanselage ◽  
Gheorghe Epuran ◽  
Bianca Tescașiu
Keyword(s):  
Foreign Direct Investment ◽  
Direct Investment ◽  
Trade Openness ◽  
Test Procedure ◽  
Real Effective Exchange Rate ◽  
Foreign Direct Investments ◽  
Causality Test ◽  
Fdi Inflows ◽  
Distributed Lag ◽  
Long Run

In this increasingly globalized era, foreign direct investments are considered to be one of the most important sources of external financing for all countries. This paper investigates the causal relationship between trade openness and foreign direct investment (FDI) inflows in Romania during the period 1997–2019. Throughout this study, Trade Openness is the main independent variable, and Gross Domestic Product (GDP), Real Effective Exchange Rate (EXR), Inflation (INF), and Education (EDU) act as control variables for investigating the relationships between trade openness (TOP) and FDI inflow in Romania. The Auto Regressive Distributed Lag (ARDL) Bounds test procedure was adopted to achieve the above-mentioned objective. Trade openness has negative and statistically significant long-run and short-run relationships with FDI inflows in Romania throughout the period. Trade openness negatively affects the FDI inflow, which suggest that the higher the level of openness is, the less likely it is that FDI will be attracted in the long run. The result of the Granger causality test indicated that Romania has a unidirectional relationship between trade openness and FDI. It also showed that the direction of causality ran from FDI to trade openness.

scholarly journals Foreign Direct Investment, Financial Development and Economic Growth Evidence from Saudi Arabia

2017 ◽  
Vol 8 (4) ◽  
pp. 228 ◽  
Author(s):  
Najeeb Muhammad Nasir ◽  
Mohammed Ziaur Rehman ◽  
Nasir Ali
Keyword(s):  
Economic Growth ◽  
Foreign Direct Investment ◽  
Financial Development ◽  
Direct Investment ◽  
Impulse Response Function ◽  
Saudi Arabian ◽  
Causality Test ◽  
Long Run ◽  
Oil Resources ◽  
Integration Test

This study is an effort to explain and establish a relationship among foreign direct investment, financial development and economic growth in Saudi Arabian context for the period of 1970 to 2015 by employing Vector Auto Regression (VAR) and modified Granger Casualty Models. The result of Johansen co-integration test illustrates that no long run co-integration can be established among the variables. VAR has established a link between economic growth, financial development and foreign direct investment. The Granger causality test also confirms that economic growth causes foreign direct investment and financial development which is a unidirectional causality running from economic growth towards foreign direct investment and financial development. No significant causality can be observed empirically between foreign direct investment and financial development. This feature can be attributed to the fact that Saudi Arabian economy is still heavily dependent on its oil resources which is the driving force behind growth. Impulse Response Function has been utilized in order to observe the response to the shocks among the variables.

scholarly journals Dynamic Causal Relationships among GDP, Exports, and Foreign Direct Investment (FDI) in the Developing Countries

2013 ◽  
Vol 14 ◽  
pp. 1-19 ◽  
Author(s):  
Mohsen Mehrara ◽  
Amin Haghnejad ◽  
Jalal Dehnavi ◽  
Fereshteh Jandaghi Meybodi
Keyword(s):  
Economic Growth ◽  
Developing Countries ◽  
Foreign Direct Investment ◽  
Strong Evidence ◽  
Direct Investment ◽  
The Other ◽  
Fdi Inflows ◽  
Long Run ◽  
Short Run ◽  
Growth Hypothesis

Using panel techniques, this paper estimates the causality among economic growth, exports, and Foreign Direct Investment (FDI) inflows for developing countries over the period of 1980 to 2008. The study indicates that; firstly, there is strong evidence of bidirectional causality between economic growth and FDI inflows. Secondly, the exports-led growth hypothesis is supported by the finding of unidirectional causality running from exports to economic growth in both the short-run and the long-run. Thirdly, export is not Granger caused by economic growth and FDI inflow in either the short run or the long run. On the basis of the obtained results, it is recommended that outward-oriented strategies and policies of attracting FDI be pursued by developing countries to achieve higher rates of economic growth. On the other hand, the countries can increase FDI inflows by stimulating their economic growth.

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