Purpose: The purpose of this research is to investigate the impact and current link between economic growth and foreign direct investment (FDI) on financial development in Palestine, as well as the role of financial development in influencing this relationship. Design/Methodology/Approach: The logical reasoning approach associated with quantitative research was applied in this study, which was backed up by experience and positivism as philosophical viewpoints. Data on economic growth indicators, foreign direct investment (FDI), financial development, and other control variables were also used, spanning the years (1998 to 2019). To determine whether there is an effect and a relationship between economic growth, foreign direct investment (FDI), and financial development in Palestine, Johansen's co-integration analysis method will be used. Results: Johansen's co-integration discovered that economic growth, foreign direct investment (FDI), and financial development have a favourable influence and a Long-Term association. Furthermore, there was a statistically significant relationship between stock market financial development indices and foreign direct investment (FDI). Practical Implications: This study adds to the literature by evaluating whether foreign direct investment (FDI) drives growth through financial development networks and other factors that can drive growth in addition to foreign direct investment (FDI). A well-developed financial market, according to research, will boost the impact of indirect foreign direct investment (FDI) on economic growth. By offering enough liquidity services that increase links between local and global investors, a well-developed stock market will promote capital accumulation activities and output growth. Originality/Value: This study is unique in that it examines the impact and relationship between economic growth and foreign direct investment (FDI) in Palestine on financial development, which must be considered in all developing countries' Long-Term development plans. Simultaneously, this study is a step ahead in examining the relationship between economic growth and foreign direct investment (FDI) in Palestine, as well as their primary function in financial development.
This study examined the impact of Capital Flight on Economic Growth and Financial Stability in Palestine from the period (2000-2020). The time series data of Capital Flight, Foreign Exchange Reserves, Foreign Debt, and Real GDP used in the study, and the use of ordinary least squares estimation technology to analyze the research data. Carried out Johansen co-integration and error correction mechanism. The evidence of the research results shows that there is a co-integration relationship between the research variables, and Capital Flight has harmed the Economic Growth of the Palestinian case. Based on these findings, the study recommends that the government should provide a favorable investment environment to encourage investment and prevent Capital Flight from Palestine. In addition, the Palestinian Government should also prevent Capital Flight because these Infrastructure Projects/Programs will reduce the country’s production costs. The government should create a suitable investment environment for foreign investment and encourage entrepreneurs and equity owners to invest these funds domestically. In addition, the government should use all Foreign Aid funds in appropriate places to increase the Economic Growth Rate and create job opportunities for the unemployed, thereby increasing the National Economic Growth Rate.
In the present study was to verify the relationship between capital flight and illicit financial flows, exhibiting the impact of stable economic growth in Palestine during the period (2009-2018). We also use models of the balance of payments of the State, the study results showed that the total illicit financial flows, about $14.42 million annually, 16.4% of GDP. In addition, through the application of the net omissions and style error in the balance of payments and expenditures, the total capital flight estimated at $26.61 million, 19.6% of GDP. The Granger causality test shows that economic growth granger causes both the illicit financial flows and the capital flight. The study also found that there is a negative and significant relationship between economic growth and capital flight. Furthermore, there is a positive relationship between illicit financial flows and capital flight. We have examined theory (Granger) causality, which shows that economic growth causes all of the illegal financial flows and capital flight. The study showed also negative correlation and significant between economic growth and capital flight. Besides, it can be this relationship is negative between illicit financial flows and capital flight. This relationship can be detailed in this research. It seems this experimental investigation is also a strong relationship and engagement between capital flight and financial flows from the standpoint of their impact on economic growth in Palestine. It can be summarized in the study that the process of capital flows and capital flight represent an important role in raising the rate of economic recovery in the country and that the flow of capital within the state is one of the most important factors for national economic growth.
This study examines the Impact of Foreign Aid on Economic Growth in Palestine by considering time series data of the last twenty years from (2000-2019). Foreign Aid's Impact on the Palestinian Economy explored with the Gross Domestic Product (GDP) as the dependent variable against few selected independent variables such as Foreign Aid, Remittance, Investment, Labour Force and Lagged (GDP). This study used the Partial Adjustment Model to analyze the Impact of Foreign Aid on Economic Growth in Palestine and also applied the (Chow Test) to examine whether there was a Structural Breakthrough in the Palestinian Economy. The results indicate that Foreign Aid has a positive relationship with (GDP). However, the relationship is not significant since the higher volume of Foreign Aid used in Humanitarian and Social Welfare rather than Production Activities in the real sectors. (Chow Test) shows that the relationship between Foreign Aid (GDP) has not witnessed a Structural Breakthrough in the Palestinian Economy over the past twenty years. In light of these empirical results, we suggest that Government Policy-Makers and Decision-Makers allocate this Foreign Aid to Productive Sectors and Human Capital formation (HC) activities with a special focus on capital expenditures to achieve a high rate of the country's Economic Growth and Development and to meet the periodic plan and Long-Term Development goals.
The study aims to investigate and examine the impact of International Capital Flows and other Financial Flows on Economic Growth in Palestine during the period (2007-2018). This study also included trends and methods of forming Capital Flows and Financial Capital Flows. The study used the appropriate descriptive and analytical approach by the authors for the purposes and requirements of the research to investigate the real results and required. The researchers used the time intervals method, and the study concluded that Foreign Direct Investment (FDI), Foreign Portfolio Investment (FPI), Large Loans (World Bank), Worker Remittances (WR), Foreign Affairs Borrowing and Financial Grants (GR) have a noticeable positive impact on Economic Growth in Palestine. The study made several important and useful recommendations, the most notably: That Palestinian Government must lay down and establish lighter and comfortable rules and regulations for investors to attract more investors and Foreign Investments to Palestine. Besides, the Palestinian Government must work hard side by side with the other Developed Countries for reaching better Economic Development and increasing a good rate. To achieve a good rate of Economic Growth, the government must work hard to create job opportunities for citizens to reduce the high Unemployment rate in the country. The Government should improve the standard of living and competitiveness in global markets and obtain a sufficient share in the International Financial Markets, so the Government must work to provide new opportunities for Global Markets Integration by creating a good environment to increase Economic Growth and Technology Development.
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