scholarly journals Cointegration and causality analysis between foreign direct investment, exports and economic growth in the republic of Croatia

2021 ◽  
Vol 26 (2) ◽  
pp. 145-158
Author(s):  
Martina Sopta ◽  
Vlatka Bilas ◽  
Sanja Franc
Keyword(s):  
Economic Growth ◽  
Growth Rate ◽  
Granger Causality Test ◽  
Corporate Management ◽  
Causality Test ◽  
Goods And Services ◽  
Real Gdp ◽  
Gdp Growth Rate ◽  
Cointegration Tests ◽  
The Republic

The main objective of this paper is to analyze the causal relationship between foreign direct investment (FDI), exports, and economic growth in the Republic of Croatia for the period 2000-2020 and determine the implications of research results on corporate management. The management of the investment enterprise is usually interested in high returns, whereas the management of the recipient enterprise is interested in higher productivity, spillovers, and larger market share on domestic and international markets. Several methodological approaches, including unit root tests, cointegration tests, and Granger causality test, were used to assess the relationship between gross domestic product (GDP) growth rate, on the one side, and the share of FDI and total exports of goods and services in real GDP, on the other side. The results of cointegration tests indicated there is no long-term relationship between the real GDP growth rate, the share of FDI, and the share of exports of goods and services in real GDP. Based on the Granger causality test, it cannot be concluded that there is no causal relationship between the analysed variables. Finally, the paper discusses the implications of the conducted research for corporate management. The results indicate that managers are not discouraged by the fact that FDI is not correlated to economic growth, as investment decisions are determined by numerous factors and not primarily by the growth rate of a recipient country.

scholarly journals The relationship between banks' credit activity and economic growth: An empirical research for the Republic of Serbia

Industrija ◽  
2020 ◽  
Vol 48 (2) ◽  
pp. 37-53
Author(s):  
Milka Grbić ◽  
Stevan Luković
Keyword(s):  
Economic Growth ◽  
Banking Sector ◽  
Research Study ◽  
Causality Test ◽  
Real Gdp ◽  
Gdp Growth Rate ◽  
Interactive Relationship ◽  
The Republic ◽  
The Relationship ◽  
Different Order

The subject matter of the research study conducted in this paper is the interactive relationship between banks' credit activity and economic growth. In connection with that, the paper is aimed at examining the existence and direction of the cause and effect relationship between the credit activity of the banking sector and the overall economic activity in the Republic of Serbia. The quarterly data related to the period from 2003 to 2019 were collected for the purposes of the research. The share of the loans granted to enterprises in the GDP and the share of the loans granted to households in the GDP are used as the indicators of the credit activity in the study, whereas the real GDP growth rate is determined as the indicator of economic growth. Given the fact that the observed time series are of the different order of integration, the analysis is conducted within the VAR model by applying the Toda-Yamamoto procedure of the Granger causality test. The results of the research show a significant unidirectional causal relationship according to Granger, which starts from the direction of banks' credit activity towards economic growth. The results of the conducted research study can be useful to the makers of the economic policy and the creators of a strategy for the development of the national economy.

scholarly journals INNOVATION EFFECT THROUGH RESEARCH AND DEVELOPMENT ON ECONOMIC GROWTH IN 35 OECD COUNTRIES

2021 ◽  
Vol 11 (4) ◽  
pp. 159-166
Author(s):  
Maman Ali M. Moustapha ◽  
Qian Yu
Keyword(s):  
Economic Growth ◽  
Growth Rate ◽  
Research And Development ◽  
Regression Model ◽  
Oecd Countries ◽  
Multiple Regression Model ◽  
Gdp Growth ◽  
Real Gdp ◽  
Gdp Growth Rate ◽  
Development Expenditure

This paper analyzes the effect of research and development (R&D) expenditures on economic growth in the Organization of Economic Cooperation and Development (OECD) countries over the period 2000-2016. This study conducts an empirical analysis using a multiple regression model. The main findings confirm that an increase in research and development expenditure by 1% would generate an increase of real GDP growth rate to 2.83 %. The implication emerging from this study is that government and institutions need to increase investment in R&D expenditures to fulfill inclusive economic growth perspective.

scholarly journals Taxation, government spending and economic growth: The case of Bulgaria

2021 ◽  
Vol 7 (3) ◽  
pp. 255-266
Author(s):  
G. Ganchev ◽  
◽  
I. Todorov ◽  
Keyword(s):  
Economic Growth ◽  
Growth Rate ◽  
Tax Revenue ◽  
Gdp Growth ◽  
Real Gdp ◽  
Long Run ◽  
Gdp Growth Rate ◽  
Short Run ◽  
The Impact

The objective of this article is to estimate the impact of three fiscal instruments (direct taxes, indirect taxes, and government expenditure) on Bulgaria’s economic growth. The study employs an autoregressive distributed lag model (ARDL) and Eurostat quarterly seasonally adjusted data for the period 1999–2020. Four control variables (the shares of gross capital formation, household consumption, and exports in GDP as well as the economic growth in the euro area) are included in the model to account for the influence of non-fiscal factors on Bulgaria’s real GDP growth rate. The empirical results indicate a long-run equilibrium relationship between Bulgaria’s economic growth and the independent variables in the ARDL. In the short term, Bulgaria’s real GDP growth rate is affected by its own past values and the previous values of the shares of direct tax revenue, exports, government consumption, and indirect tax revenue in GDP. In the long term, Bulgaria’s economic growth is influenced by its own previous values and the past values of the share of household consumption in GDP and the euro area’s real GDP growth rate. Fiscal instruments can be used to stabilize Bulgaria’s growth in the short run but they are neutral in the long run. The direct tax revenue, government consumption, and indirect tax revenue are highly effective and can be used as tools for invigorating and stabilizing Bulgaria’s economic growth in the short run. However, in the long term, the real GDP growth rate can be hastened only by encouraging domestic demand (final consumption expenditure of households) and promoting exports. This research cannot answer the question of whether flat income taxation stabilizes the economy or not, since it does not separate the impact of tax rate changes from the influence of tax base modifications.

scholarly journals Foreign Direct Investment, Economic Growth, and Environmental Concern: Evidence from Nigeria

2013 ◽  
Vol 5 (7) ◽  
pp. 460-468
Author(s):  
Jonathan D. Danladi
Keyword(s):  
Economic Growth ◽  
Growth Rate ◽  
Foreign Direct Investment ◽  
Host Country ◽  
Direct Investment ◽  
Environmental Concern ◽  
Granger Causality Test ◽  
Multinational Companies ◽  
Causality Test ◽  
Growth Economic

One of the reasons pointed out, as the major cause of low investment in Nigeria is low saving. To bridge the saving-investment gap, there have been calls for inflow of foreign direct investment into the country. However, there are arguments about the impacts of FDI on the host country. Principal among the various arguments is its effect on environmental degradation .This paper sets out to examine the validity of this perception using Granger causality test. It examines the direction of causality between FDI and economic growth, Economic growth and Pollution, FDI and Pollution. The results revealed that there is no causality between the growth rate of GDP and FDI, growth rate of GDP and Co 2. The only causality found is a unidirectional causality between the growths of FDI grows and the growth rate of pollution. The direction is from growth rate of FDI to the growth rate of pollution. This paper concludes that government should make policy that will ensure that multinational companies use equipment that is environmentally friendly.

scholarly journals Role of Exports in Economic Growth: Evidence from India

2020 ◽  
Vol 65 (4) ◽  
Author(s):  
Tamma Koti Reddy
Keyword(s):  
Economic Growth ◽  
Causal Relation ◽  
International Markets ◽  
Export Growth ◽  
Gdp Growth ◽  
Causality Test ◽  
Real Gdp ◽  
Gdp Growth Rate ◽  
New Strategy ◽  
Auto Regressive

The study attempts to examine the causal relation among export growth, inflation, foreign direct investment and real GDP growth rate for the period 1990-91 to 2018-19 using Vector Auto Regressive (VAR) model and Granger Causality test. Both the statistical techniques employed show similar results pertaining to the causal relationship among the variables selected for the study. The results show that FDI & Real GDP growth have positive effect on export growth and there is no evidence of inflation alone causing export growth, but inflation along with FDI and Real GDP cause the Export growth. There is also evidence that export growth, inflation, real GDP growth together cause FDI. The results also indicate that none of the aforementioned economic variables either individually or jointly cause real GDP growth. The authors opine that slow growth in exports had been compensated by domestic demand and services-led growth in the process of economic growth during the period of study. The study stressed the need for introducing structural reforms to enhance the competitiveness of Indian products in the international markets. The focus should be on designing a new strategy for technology-driven export-oriented sectors as the export stability is positively associated with economic growth.

India’s Recession Phase- a Review

2014 ◽  
Vol 10 (3) ◽  
pp. 221-234
Author(s):  
J K Sachdeva ◽  
Nupur Gupta Bhattacharya
Keyword(s):  
Economic Growth ◽  
Growth Rate ◽  
Real Economy ◽  
Economic Growth Rate ◽  
Goods And Services ◽  
Gdp Growth Rate ◽  
Consecutive Period ◽  
Reform Period ◽  
Consumption Saving ◽  
Internal Consumption

India’s growth rate picked up from 4% during (pre-reform period) to 9 % during the first decade of this century (2001-10). Earlier India was affected less by external world depressions as it relied more on internal consumption, saving and import substitutions. However, after reforms picked up, its economy was opened to global players, share of exports, both goods and services, in GDP grew significantly. There is a consensus among economists that every economic expansion is followed by recession. During the boom, when economic growth is too fast and unsustainable, inflation increases. To reduce it, the governments deflate the economy by various ways which result into credit crunch and falling prices.  Cost push inflation squeezes incomes and reduces disposable income. This causes a collapse in confidence of finance sector and 'real economy'. Indian economy also passed through these stages during  2008-12. The economic growth rate was above 8% for consecutive period of three years since 2006. However by the time it reached 2012 the GDP growth rate fell to 5% approximately. This paper is an attempt to explore the reasons for India’s recent fall of growth in GDP.by exploring pre-reforms and post-reforms scenario analysing the data from April, 1971- March 2012 (in short 1971 to 2011),and by examining short term quarterly data from 2008 to 2012 to explore affected sectors.

scholarly journals What is the relationship between FDI and economic growth? Evidence from EU15 countries

2020 ◽  
Vol 8 (1) ◽  
pp. 253-281
Author(s):  
Vlatka Bilas
Keyword(s):  
Economic Growth ◽  
Growth Rate ◽  
Panel Cointegration ◽  
Gdp Growth ◽  
Causality Test ◽  
Ardl Model ◽  
Long Run ◽  
Gdp Growth Rate ◽  
The Impact ◽  
The Relationship

The aim of the paper is to examine the relationship between foreign direct investment (FDI) and economic growth in EU15 countries over the period 2002-2018. EU15 makes a group of countries which entered the EU prior to the biggest enlargement in 2004, namely latest in 1995 (Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Netherlands, Portugal, Spain, Sweden and United Kingdom). Paper findings contribute to the existing literature on the impact of FDI on economic growth. It employs different unit root tests, panel cointegration test (ARDL model) and Granger causality. Estimated panel ARDL model found some evidence that there are long-run equilibrium between LogGDP, LogFDI and LogFDIP series. The rate of adjustment back to equilibrium is between 4.43% and 5.95%. The long-run coefficients are all positive, but not all of them are statistically significant. In case of LogFDIP series long-run coefficients are statistically significant, varying between 0.1226 and 0.4398. These coefficients indicate that 1% increase in LogFDIP (logarithm of FDI to GDP) increases LogGDP between 0.1226% and 0.4398%. Results of Dumitrescu-Hurlin panel causality test indicated that there is only unidirectional causal relationship from GDP growth rate to FDI growth rate, and from GDP growth rate to LogFDIP. Conclusively, there is only a weak evidence that FDI had statistically significant impact on the GDP in EU15 countries.

scholarly journals INVESTMENTS AND TAXES IN ARMENIA (1997–2008)

2010 ◽  
Vol 1 (2) ◽  
pp. 202
Author(s):  
Nina Kutsanyan ◽  
Anaida Virabian ◽  
Vahram Baghdasaryan
Keyword(s):  
Economic Growth ◽  
Growth Rate ◽  
Var Model ◽  
Gdp Growth ◽  
Quarterly Data ◽  
Real Gdp ◽  
Gdp Growth Rate ◽  
Tax Changes ◽  
Investment Growth ◽  
The Impact

Present paper investigates the effect of changes in investment and taxes on the economic growth. Using quarterly data from 1997 to 2008 for Armenian economy we showed that the effect of the increase in investment and taxes on real GDP is positive or negative. The interrelation between GDP and investment is studied using the approach based on the development of VAR model. The analysis of this model allowed studying the behaviour of curves representing GDP and investment. In fact, we showed that the GDP curve is stable and oscillated and the investment curve is stable and none oscillated. Furthermore, we evaluated the impact of investment changes by 1% on the GDP growth which was equal to 0.4%. Then the model representing interrelation between GDP and taxes allowed evaluating the effect of tax changes by 1%. The findings allowed evaluating the effect of growth in investment and taxes depending on the GDP growth rate. Simultaneously, VAR system allowed evaluating the changes in GDP on the investment growth.

Analysis of approaches to assessing changes in welfare and real GDP growth during digitalization of the economy

2022 ◽  
pp. 126-146
Author(s):  
S. G. Marichev
Keyword(s):  
Economic Growth ◽  
Economic Effect ◽  
Added Value ◽  
Gdp Growth ◽  
Digital Goods ◽  
Relative Ease ◽  
Real Gdp ◽  
Digital Services ◽  
Republic Of Bashkortostan ◽  
The Republic

The paper attempts to estimate, in monetary terms, the volume of free digital services in GDP while assessing the contribution of digitalization to changes in welfare and economic growth. Approaches to such an estimation are analyzed and criticized. In particular, the calculation of the added value created in the digital sector does not properly reflect the economic effect of digitalization. Alternative auxiliary methods for estimating the contribution of digitalization to GDP growth are considered: the creation of satellite accounts of the digital economy within the SNA; the categorization and calculation of “purely” digital goods. The paper analyzes the methodology of calculating GDP which takes into account consumer surpluses from the use of free digital goods. The advantages of this methodology are outlined, including the consideration of a significant part of the digital sector of the economy in the calculation of GDP, as well as the relative ease of its use. This methodology was tested by drawing on the example of the Republic of Bashkortostan.

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