scholarly journals Impact of Foreign Direct Investment on Economic Growth in Ethiopia

2021 ◽  
Vol 4 (10) ◽  
pp. 56
Author(s):  
Abdillahi Nedif Muse ◽  
Saidatulakmal Mohd
Keyword(s):  
Economic Growth ◽  
Human Capital ◽  
Foreign Direct Investment ◽  
Direct Investment ◽  
Capital Investment ◽  
Positive Impact ◽  
Vector Autoregressions ◽  
Government Consumption ◽  
Long Run ◽  
The Impact

This article analyses the impact of foreign direct investment (FDI) on Ethiopia’s economic growth. For this purpose, it uses Vector Autoregressions (VARs) model for the period comprised by years 1981-2017. It finds that FDI had a significant positive impact on Ethiopia’s economic growth for both the short and long-run periods. Adequate human capital and stable macroeconomic envirornment have catalysed the contribution of FDI to economic growth. Gross fixed capital formation and government consumption exerted a negative and significant effects on economic growth during the period of interest. Moreover, the study reveals that there is no causal relationship between FDI and economic development. Ethiopia needs to open up the economy and restructure the financial sector to attract foreign multinational companies (MNC), especially in the manufacturing and agro-industry sectors. Human capital investment should be strength to absorb more foreign direct investment and transform the agricultural-based economy to a modern one. Effective budgeting system and prioritisation of government consumption will support a more rapidly growing economy.

scholarly journals The Impact of Human Capital and Foreign Direct Investment on Economic Growth: An Empirical Study on Jordan

2020 ◽  
Vol 10 (2) ◽  
pp. 182
Author(s):  
Mustafa Mohammad Alalawneh
Keyword(s):  
Economic Growth ◽  
Human Capital ◽  
Foreign Direct Investment ◽  
Direct Investment ◽  
Advanced Technology ◽  
Bounds Testing ◽  
Long Run ◽  
Auto Regressive ◽  
Human Capital Index ◽  
The Impact

Human capital is a real factor in improving the investment climate and attracting foreign investment. FDI also increases human capital in the host country through the transfer of advanced technology and the rehabilitation of local labor. The importance of the study comes from Jordan's serious endeavor to attract foreign direct investment and to present itself as a rich country in human and qualified capacities. This study examines the effect of human capital and foreign direct investment on economic growth in Jordan employing Auto Regressive Distributed Lags Bounds Testing (ARDL BT) co-integration method for the spanning period from 1984 to 2018. The results indicate that there is a long- run relationship among variables. The results showed that there is a negative and statistically significant effect of human capital index (HCI) on economic growth (GWP) in the long run, and a positive and statistically significant effect of FDI (GFDI) on economic growth (GWP) in the long run. The estimation results indicate that a 1% increase in (HCI) decreases (GWP) by 0.272%, and a 1% increase in (GFDI) increases (GWP) by 0.006%. This study is one of the few studies that highlight the challenges facing both HC and FDI in increasing economic growth in Jordan and provides some recommendations.

scholarly journals Elections, Foreign Direct Investment, and Economic Growth in Ghana’s Fourth Republic: 1993 to 2016

2019 ◽  
pp. 1-8
Keyword(s):  
Economic Growth ◽  
Foreign Direct Investment ◽  
Direct Investment ◽  
Time Series Data ◽  
Positive Impact ◽  
Series Data ◽  
Long Run ◽  
Negative Effect ◽  
Short Run ◽  
The Impact

Foreign Direct Investment (FDI) has been seen as an important factor influencing economic growth directly and indirectly in both developed and developing countries. This study assesses the impact of FDI on growth in Ghana since the return to constitutional rule in 1993. The study uses time series data from 1993 to 2016. Using the Autoregressive Distributed Lagged model (ARDL), the study finds a positive impact of FDI on growth both in the short-run and long-run. However, there is a lag period of two. The study equally finds that Gross Saving has a positive impact on growth. On the other hand inflation has a negative effect on growth both in the short and long run. The study also discovered that FDI granger causes growth but GDP does not granger cause FDI. Post-election years with incidence of political uncertainty slow down FDI inflow into Ghana. The study recommends the adoption of stringent fiscal and monetary policies to keep inflation low. It also recommends maintaining and improving the liberal market environment to attract investors, policies to encourage saving, and improving on political transitions to avoid uncertainties for investors.

Foreign direct investment and economic growth in South America

2019 ◽  
Vol 46 (2) ◽  
pp. 383-398 ◽  
Author(s):  
Victor Owusu-Nantwi ◽  
Christopher Erickson
Keyword(s):  
Economic Growth ◽  
Foreign Direct Investment ◽  
South America ◽  
Growth And Development ◽  
Direct Investment ◽  
Positive Impact ◽  
Cointegration Test ◽  
Content Type ◽  
Long Run ◽  
The Impact

Purpose The purpose of this paper is to investigate the impact of foreign direct investment (FDI) on economic growth in countries in South America. Additionally, the study explores the causal linkage between FDI and growth in the region. Design/methodology/approach The study employs Pedroni’s cointegration test to examine the long-run relationship between FDI and economic growth in South America. Further, the study employs the vector error correction model (VECM) to examine the long-run relationship, and the causal nexus between FDI and economic growth in South America for the period 1980–2015. Findings The Pedroni cointegration test establishes a long-run relationship between FDI and economic growth in a panel of ten countries in South America. The long-run estimates of the study find a significant positive impact of FDI on economic growth in the region. The VECM results find a short-run bidirectional causality between FDI and economic growth. The error-term is negative and significant. This indicates the presence of long-run equilibrium relationship among the variables. Practical implications Countries in South America should adopt policies that would substantially enlarge FDI inflows to enhance their growth and development. Originality/value Numerous studies have examined the impact of FDI on economic growth in the context of Latin America. This study fills a gap in the existing literature by providing an empirical evidence that focuses on South America. This additional perspective could form the basis for the evaluation of the investment policies, and help policymakers to pursue FDI policies that would enhance growth and development in South America.

scholarly journals The impact of Chinese Foreign Direct Investment on economic growth of Peru

2020 ◽  
Vol 3 (6) ◽  
pp. 32
Author(s):  
María Osterloh Mejía ◽  
Nadia Urriola Canchari ◽  
Xiangzheng Deng
Keyword(s):  
Economic Growth ◽  
Foreign Direct Investment ◽  
Direct Investment ◽  
Positive Impact ◽  
Local Economy ◽  
Series Data ◽  
Causality Test ◽  
Long Run ◽  
Integration Test ◽  
The Impact

Since 2000, the Peruvian economic policy presented a positive impact on the economic growth thanks to Foreign Direct Investment (FDI) increase and the inclusion of foreign markets in the local economy. This study analyzes and quantifies the short and long-run impact of FDI and Foreign Direct Investment from China (FDICH) on economic growth in Peru, using annual time series data from 2001 to 2018 obtained from the Central Bank of Peru and the World Bank. Vector Autoregression (VAR) Model, Augmented Dickey-Fuller test, Johansen Co-integration test, and Granger Causality test were employed for data analysis through the production function. The findings revealed the impact and significance of FDI and FDICH in the short and long-run, which were positive and significant. Moreover, the Co-integration test (for long-run relationship) was positive, and the causality test in the relationship between all variables and the economic growth revealed the directionality of these links.

The nexus between financial development and energy consumption: Estimating the role of foreign direct investment, economic growth and urbanization

2021 ◽  
pp. 0958305X2110453
Author(s):  
Jaleel Ahmed ◽  
Shuja ur Rehman ◽  
Zaid Zuhaira ◽  
Shoaib Nisar
Keyword(s):  
Economic Growth ◽  
Foreign Direct Investment ◽  
Energy Consumption ◽  
Financial Development ◽  
Latin American ◽  
Direct Investment ◽  
Negative Impact ◽  
Positive Impact ◽  
Supply And Demand ◽  
The Impact

This study examines the impact of financial development on energy consumption for a wide array of countries. The estimators used for financial development are foreign direct investment, economic growth and urbanization. The study employed a panel data regression on 136 countries with time frame of years 1990 to 2019. The model in this study deploys system GMM technique to estimate the model. The results show that financial development has a significant negative impact on energy consumption overall. Foreign direct investment and urbanization has significant impact on energy consumption. Also, economic growth positive impact on energy consumption its mean that economic growth promotes energy consumption. When dividing further the sample into different groups of regions such as Asian, European, African, North/Latin American and Caribbean countries then mixed results related to the nexus between financial development and energy consumption with respect to economic growth, urbanization and foreign direct investment. The policymakers in these different groups of countries must balance the relationship between energy supply and demand to achieving the sustainable economic development.

scholarly journals ANALISIS PENGARUH REMITANSI, INVESTASI ASING LANGSUNG, IMPOR DAN PERTUMBUHAN EKONOMI DI INDONESIA

2020 ◽  
Vol 2 (4) ◽  
Author(s):  
Regina Septriani Putri ◽  
Ariusni Ariusni
Keyword(s):  
Economic Growth ◽  
Foreign Direct Investment ◽  
Direct Investment ◽  
Time Series Data ◽  
Positive Impact ◽  
Series Data ◽  
Long Run ◽  
Short Run ◽  
The Government ◽  
Positive Effect

Abstract : This study examined and analysis the effect of remittances, foreigndirect investment, imports, and economic growth in Indonesia in the long run andshort run. This study using Error Correction Model (ECM) method and using theannual time series data from 1989 to 2018. This study found that: (1) remittancehave an insignificant positive effect on economic growth in the long run and shortrun,(2)foreign direct investment have a significant positive impact on economicgrowth in the long run and short run, (3) import have an insignificant positiveimpact on economic growth both in the long run and short run. To increase theeconomic growth in the future, this study suggests the government to decresingimports of consume goods and increasing the inflow of capital goods, rawmaterial goods, remittances and foreign direct investment.Keyword : Remittance, Foreign Direct Investment, Import, Economic Growth andECM

scholarly journals Relationship Economic Growth with Foreign Direct Investment

2020 ◽  
Vol 3 (3) ◽  
pp. 49-68
Author(s):  
Prince Charles Heston Runtunuwu
Keyword(s):  
Economic Growth ◽  
Foreign Direct Investment ◽  
Foreign Investment ◽  
Direct Investment ◽  
Positive Impact ◽  
Secondary Data ◽  
Causality Test ◽  
Long Run ◽  
Causality Relationship ◽  
The One

This study aims to determine the one-way causality relationship between foreign investment and economic growth, a one-way causality relationship between economic growth and foreign investment, and a two-way causality relationship between foreign investment and economic growth in Indonesia. This was conducted in Indonesia, the data are secondary data taken using the method time series from 1971 to 2018 from the official websites, the Investment Coordinating Board, and literature sources, Foreign Investment and Gross Domestic Product. (1) in the long run the Economic Growth variable has a significant effect on Foreign Direct Investment, and vice versa; and (2) the Foreign Direct Investment variable has a significant effect on Economic Growth; (3) in the short term, the Economic Growth variable has an influence on Foreign Direct Investment, and vice versa; and the Foreign Direct Investment variable has an influence on Economic Growth. It is possible to have a better long-term relationship, bringing positive impact on economic growth in Indonesia when investment in Indonesia increases. Conversely, when economic growth decreases, it means that foreign investment is also low. Granger Causality test, shows a two-way causality relationship between Economic Growth and Foreign Direct Investment and vice versa. It is necessary to maintain growth to attract foreign direct investment, as well as foreign investment. Investment climate needs to be improved enabling to invest in Indonesia.

scholarly journals THE IMPACT OF INNOVATION ON ECONOMIC GROWTH: THE SPILLOVER EFFECT OF FOREIGN DIRECT INVESTMENT

2020 ◽  
Vol 8 (2) ◽  
pp. 708-714
Author(s):  
Nguyen Tran Thai Ha ◽  
Sobar M. Johari ◽  
Trinh Thi Huyen Thuong ◽  
Nguyen Thi Minh Phuong ◽  
Le Thi Hong Anh
Keyword(s):  
Economic Growth ◽  
Foreign Direct Investment ◽  
Research And Development ◽  
Direct Investment ◽  
Positive Impact ◽  
Spillover Effect ◽  
Empirical Method ◽  
Convincing Evidence ◽  
Positive Contribution ◽  
The Impact

Purpose of the study: Innovation is seen as the key to improving quality and productivity, thereby promoting competition and economic growth. This study analyzes the impact of innovation on economic growth through various measures, such as research and development spending, the number of researchers, number of patents as well as trademark registrations. Research results are evidence to recommend policies for intellectual-based economic growth. Methodology: Literature review and empirical analysis conducted in the study. The empirical method is a two-step System Generalize Methods of Moments (GMM), aiming at reliable results. Accessing the World Bank Database, research data from 64 developed and developing countries are collected from 2006 to 2014. Main Findings: The empirical findings show that innovation plays a crucial contribution in promoting economic growth, similar to national openness and government spending on education. This study also finds a positive impact on foreign investment flows and their spillover role in enhancing the correlation between innovation and economic growth. Applications of this study: The findings of this study focus on the contributions of innovation, foreign direct investment inflows, and other macro factors that can be enforced to improve economic growth by policymakers. Novelty/Originality of this study: The study uses different measures of innovation, including inputs such as the number of researchers, research and development expenditure, and outputs as the number of patents and number of trademark registrations. Empirical findings are found consistently, thus confirming that innovation is very important for economic growth. The study also shows convincing evidence confirming the positive contribution of foreign direct investment as well as its spillover effect on innovation and economic growth.

scholarly journals An Investigation of the Dynamic Effect of Foreign Direct Investment (FDI) and Interest Rates on GDP in South Africa

2018 ◽  
Vol 10 (5(J)) ◽  
pp. 29-37
Author(s):  
Thomas Habanabakize ◽  
Daniel F Meyer
Keyword(s):  
Economic Growth ◽  
South Africa ◽  
Foreign Direct Investment ◽  
South African ◽  
Significant Relationship ◽  
Direct Investment ◽  
Positive Relationship ◽  
Positive Impact ◽  
Long Run ◽  
Repo Rate

Economic growth in South Africa has been in the “doldrums” for the past decade. If well managed, foreign direct investment (FDI) and repo rate (interest rate) could have a positive impact and assist in rapid economic growth so urgently needed in South Africa. FDI has been a driving force for growth in many developing economies. Not enough has been done to attract FDI in South Africa. The country has enormous ability and capacity to attract FDI inflows and to have the advantages from it. A quantitative research approach was used to analyse the association amongst the variables which include FDI, GDP and repo rate in the South African economy. The South African Reserve Bank database was used and the period analysed is from 2000 to 2016. Statistical and econometric methods such as correlation analysis, unit root tests, ARDL Bounds test for cointegration, an error correction model (ECM), and the Granger causality tests were used. Subsequently, after the econometric model was estimated, findings indicated the existence of a long-run relationship between the three variables. While, a significant positive relationship exists between FDI and GDP, a negative long-run relationship was found between GDP and repo rate and interestingly a nonsignificant relationship between repo rate and FDI. In the short run, the positive effect of FDI on GDP is minimal whilst a significant and positive relationship exists between GDP and repo rate. The results did also show some limitations in the results, with regards to FDI and repo rate that there is no significant relationship between the variables, meaning that repo rate does not have an impact on FDIs. Although some long-run evidence was found of FDI playing a role in economic growth in South Africa, such impact is limited. Also very interesting is that the repo rate and FDI do not have a statistically significant relationship. This could be due to the rising risks associated with investments in the country. In conclusion, there are many variables which could have a positive impact on the attraction of FDIs and such factors will be explored further in future studies. 

scholarly journals Selected macroeconomic determinants and economic growth in Cameroon (1970–2018) “dead or alive” an ARDL approach

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Kesuh Jude Thaddeus ◽  
Chi Aloysius Ngong ◽  
Njimukala Moses Nebong ◽  
Akume Daniel Akume ◽  
Jumbo Urie Eleazar ◽  
...  
Keyword(s):  
Economic Growth ◽  
Human Capital ◽  
Foreign Direct Investment ◽  
Direct Investment ◽  
Government Expenditure ◽  
Human Capital Development ◽  
Content Type ◽  
Capital Development ◽  
Macroeconomic Determinants ◽  
The Impact

PurposeThe purpose of this paper is to examine key macroeconomic determinants on Cameroon's economic growth from 1970 to 2018.Design/methodology/approachData were obtained from the World Development Indicators and applied on time series data econometric techniques. The auto-regressive distributed lag (ARDL) bounds model analyzed the data since the variables had different order of integration.FindingsThe results showed long and short runs’ positive and significant connection between economic growth in Cameroon and government expenditure; trade openness, gross capital formation and exchange rate. Human capital development, foreign aid, money supply, inflation and foreign direct investment negatively and significantly affected economic growth in the short and long-runs. Hence, the macroeconomic indicators are not death.Research limitations/implicationsThe present research paper has tried to capture the impact of nine macroeconomic determinants on economic growth such as the government expenditure (LNGOVEXP), human capital development (LNHCD), foreign aids (AID), trade openness (LNTOP), foreign direct investment (LNFDI), gross capital formation (INVEST), broad money (LNM2), official exchange rate (LNEXHRATE) and Inflation (LNINFLA). However, these variables have the tendency to affect each other in a unidirectional or bidirectional manner. Further, the present research paper is unable to capture the impact of other macroeconomic variable due to the unavailability of data.Practical implicationsThe study recommends that Cameroon should use proper planning and strategic policy interventions to achieve higher sustainable economic growth with human capital development, foreign aid, money supply, foreign direct investment and moderate inflation.Social implicationsMacroeconomic indicators, if managed well, increase economic growth.Originality/valueThis paper to the best of the researcher's knowledge presents new background information to both policymakers and researchers on the main macroeconomic determinants using econometric analysis.

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