Endogenous determination of FDI growth and economic growth: the OECD case

Türkcan, Burcu; Yetkiner, I. Hakan

doi:10.1504/ijpp.2010.032305

Cited by 12 publications

(6 citation statements)

References 29 publications

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“…A study for the endogenous relationship between FDI and economic growth using panel data from 23 OECD countries for 1975-2004 concluded that FDI positively affects economic growth (Turkcan & Yetkiner, 2010). Likewise, it revealed that economic growth stimulates the growth rate of FDI inflow.…”

Section: Empirical Literaturementioning

confidence: 99%

Impact of Foreign Direct Investment on Economic Growth in Ethiopia

Muse

Mohd

2021

LAJTP

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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.

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Section: Empirical Literaturementioning

confidence: 99%

Impact of Foreign Direct Investment on Economic Growth in Ethiopia

Muse

Mohd

2021

LAJTP

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“…The market-seeking FDI considers the market size and market growth of the host economy. Thus, FDI and economic growth are important determinants of each other (Turkcan, 2008).…”

Section: Framework Of Analysismentioning

confidence: 99%

FDI inflow, ICT and economic performance of India: an empirical investigation

Nayak

Sahoo

2021

IJOEM

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PurposeThe aim of this study is to examine the impact of foreign direct investment (FDI) inflow and information and communication technology (ICT) on the economic performance of India by analysing annual data from 1991 to 2019.Design/methodology/approachThis study has used data collected from secondary sources. The variables considered for the analysis are based on the review of theoretical and empirical literature. Moreover, apart from the quantitative variables, two qualitative variables have also been considered through the use of dummy variables. The Cobb–Douglas, Transcendental logarithmic and Simultaneous equations models have been used for the study.FindingsThe result reveals that the partial elasticities of the per-capita gross domestic product (PCGDP) of India with respect to FDI, mobile density (MD) and internet density (ID) are 0.074, 0.024 and 0.036, respectively. The positive and significant coefficient of the interaction among FDI, MD and ID in the estimation of the transcendental logarithmic function indicates the importance of ICT infrastructure in extracting the best out of FDI (the coefficient is 0.011 for the model without any control variables and it is 0.005 with control variables).Originality/valueThe findings of this study are more reliable as the latest available data have been analysed through the appropriate econometric models. This study will be useful for the policymakers in the formulation of policies with regard to foreign capital and digitalisation.

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“…The Link between Foreign Direct Investment and Gross Domestic Product FDI refers to the investments made by particular companies and enterprises in other countries (Kaur et al 2013;OECD 2022;Akiri and Ushie 2020;Ramasamy and Yeung 2022). FDI generally refers to the long-term investment of capital, which is central to the integration of the international economy as it ensures stable economic ties (Türkcan et al 2008;OECD 2022;Donaubauer et al 2022). FDI makes it possible for companies to transfer assets between nations while also directly controlling business activities such as production, manufacturing, and distribution (Donaubauer et al 2022).…”

Section: The Link Between Foreign Direct Investment and Gross Domesti...mentioning

confidence: 99%

“…Foreign investment falls into two broad categories: foreign direct investment (FDI) and foreign portfolio investment (FPI) (Ullah and Tahir 2022;Botta 2018;Tsaurai 2022). In many countries, foreign investment is used to collect the capital necessary for overcoming liquidity (Türkcan et al 2008;Gunaydin and Tatoglu 2005;Agyapong and Bedjabeng 2020). Foreign investment is commonly used as a catalyst for economic development (Ullah and Economies 2023, 11, 188 3 of 21 FPI in the ten countries sampled.…”

Section: Introductionmentioning

confidence: 99%

The Association between Foreign Investment and Gross Domestic Product in Ten ASEAN Countries

Sijabat

2023

Economies

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Although empirical studies of the link between foreign direct investment, foreign portfolio investment, and economic development have long influenced economic studies, the results have been inconclusive. Focusing on ten countries, this study contributes to our understanding of foreign investment as a determinant of regional economic performance. More specifically, this study seeks to analyze the short- and long-term relationship between foreign direct investment, foreign portfolio investment, and Gross Domestic Product (GDP) in ten ASEAN member states using data from the 2009–2020 period. For this examination, this study employs a cross-sectional dependency test, followed by panel unit root and panel cointegration testing. From the results of this test, Dumitrescu–Hurlin Panel Causality (DHPC) analysis is conducted. These results show that FDI and GDP have a positive bilateral association, i.e., FDI positively affects GDP and GDP positively affects FDI, as presumed by the theory. Testing also finds bilateral causality between FPI and GDP in the ten analyzed nations. This study contributes to the literature by testing the association between FDI/FPI and GDP using fully modified least squares (FMOLS) and dynamic least squares (DMOLS) panel testing. These results show that FPI and FDI have significantly influenced GDP in ten ASEAN member states. Foreign investment has thus been shown to be the most potent means of accelerating economic development in the studied nations, and thus the governments of these ASEAN member states should formulate policies that attract foreign investors and better direct their investments.

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Endogenous determination of FDI growth and economic growth: the OECD case

Cited by 12 publications

References 29 publications

Impact of Foreign Direct Investment on Economic Growth in Ethiopia

Impact of Foreign Direct Investment on Economic Growth in Ethiopia

FDI inflow, ICT and economic performance of India: an empirical investigation

The Association between Foreign Investment and Gross Domestic Product in Ten ASEAN Countries

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