Foreign Direct Investment, Trade, and Economic Growth in MENA Countries: Empirical Analysis Using ARDL Bounds Testing Approach

Kalai, Maha; Zghidi, Nahed

doi:10.1007/s13132-017-0460-6

Cited by 64 publications

(57 citation statements)

References 28 publications

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“…While one side supports the acclaimed nexus, other opposes its reality. For instance, a recent study (Kalai and Zghidi 2019) carried on MENA economies using the dynamic Autoregressive Distributed Lag (ARDL) summarily confirmed a one-way causal link running from FDI inflow to economic expansion of the MENA economies. The finding of the study went further to establish longrun co-movement of the series of investigation.…”

Section: Review Of Literaturementioning

confidence: 94%

“…Empirically, studies such as Kalai and Zghidi (2019), Sokhanvar (2019), and Sarkodie and Strezov (2019) lent their support to the modernization theory. They believe that FDI inflow comes with its spillover effect in form technological transfer; human capital development is a key to economic expansion in the recipient economy particularly the developing ones.…”

Section: The Theoretical Link Between Fdi and Economic Growthmentioning

confidence: 98%

“…Others prove neutrality between the series in question. For instance, recent studies (Kalai and Zghidi 2019; Sokhanvar 2019; Sarkodie and Strezov 2019) confirmed the said nexus, while other authors such as the studies of Zandile and Phiri (2019), Nyoni (2018), Abdouli and Hammami (2017), and Herzer (2012) questioned the FDI-growth nexus. The case presented above is similar to the South African scenario.…”

Section: Introductionmentioning

confidence: 95%

See 2 more Smart Citations

Modeling the nexus between coal consumption, FDI inflow and economic expansion: does industrialization matter in South Africa?

Joshua

Bekun

Adedoyin

2020

Environ Sci Pollut Res

102

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This study examines the role of industrialization in the energy-growth-FDI nexus for the case of South Africa using data over the period 1970 to 2018. The empirical exercise was conducted using Pesaran Autoregressive Distributed Lag (ARDL) bounds testing approach. To accomplish our study objective, we analyze stationarity properties of the series using the unit root test after which we applied Bayer-Hanck (B-H) combined technique to cointegration to assess whether a long-run relationship exists among the series. Empirical results show that a 1% change in FDI account for 0.002% and 0.013% increase in economic expansion in the short-and long-run respectively. Also, a 1% increase in coal consumption influence GDP negatively by 0.083% and 0.207% in the short and long run respectively. Furthermore, a 1% increase in total natural resource rent positively affects GDP by 0.02% and 0.05% respectively in the short and long run. Industrialization, on the other hand, demonstrates a positive and significant impact on the economic growth process both in the short and long run. Industrialization contributes 0.506% and 1.274% to economic expansion both in the short and long run respectively. The causality tests suggest that a one-way causal link running from FDI to industrialization and from industrialization to coal consumption exists. Finally, FDI inflow drives total natural resource rents in South Africa. This study also gives reliable growth and energy policy proposals to policymakers applicable to countries around the globe.

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Section: Review Of Literaturementioning

confidence: 94%

Section: The Theoretical Link Between Fdi and Economic Growthmentioning

confidence: 98%

Section: Introductionmentioning

confidence: 95%

See 1 more Smart Citation

Modeling the nexus between coal consumption, FDI inflow and economic expansion: does industrialization matter in South Africa?

Joshua

Bekun

Adedoyin

2020

Environ Sci Pollut Res

102

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“…consensus is yet to be established as to whether the impact of FDI inflow is gainful to the economic progress of the host countries. Some studies (Flora & Agrawal 2014;Mehic et al 2017Kalai & Zghidi, 2019Pradhan et al 2019) identify FDI inflow as a driving force for economic advancement. These studies label FDI inflow as a promoter of productivity, research and development, civilization, and improvement of skill and technical know how.…”

Section: Introductionmentioning

confidence: 99%

New insight into the causal linkage between economic expansion, FDI, coal consumption, pollutant emissions and urbanization in South Africa

Joshua

Bekun

Sarkodıe

2020

Environ Sci Pollut Res

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This study examines the relationship between foreign direct investment inflows and economic growth by incorporating the role of urbanization, coal consumption and CO2 emissions as additional variables to avoid omitted variable bias. The different order of integration from the unit root test suggested the adoption of a dynamic autoregressive distributed lag bounds testing procedure. The results confirmed the existence of a long-run equilibrium relationship between the outlined series within the period under investigation with a high speed of convergence. The ARDL equilibrium relationship shows that coal consumption is the largest emitter of carbon dioxide emissions in both short-(0.77%) and long-(0.86%) run. Economic growth was found to escalate CO2 emission by approximately 0.27% (in the short-run) and 0.19% (in the long-run).The Granger causality test indicates a non-causal effect between FDI inflow and economic expansion in South Africa, which implies that FDI is not a driver of economic advancement. The empirical study shows a bidirectional causal effect between urbanization and foreign direct investment. This suggests that urban development stimulates foreign direct investment in South Africa. The findings reveal a one-way link from GDP to coal consumption, suggesting economic prosperity promotes coal consumption. The study underscores that economic development and the attraction of more economic investments is in part, dependent on the conservative policy, development of urban centres through infrastructural improvement, and establishing industrial zones.

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“…Most of the past quantitative studies research on either trade and FDI interrelationship and its effect on economic growth Balasubramanyam, Salisu, and Sapsford, (1996); Kalai and Zghidi (2017) ;Pahlavani, Wilson, and Worthingt (2005) or deal with the interrelationship within FDI and economic growth (Lipsey, 2000). The conclusion of all these studies was that inward FDI and trade stimulate economic growth, but all were unable to deliver a definite proof on the interrelation and the conclusive direction particularly in developing countries.…”

Section: Introductionmentioning

confidence: 99%

Does Foreign Direct Investment Lead to Economic Growth? Evidences from Asian Developing Countries

Ali¹,

Mingque²

2018

IJEF

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The study about the interrelationship between FDI and economic growth in the host country is one of the hottest discussions. Some of the studies have evidence and consider FDI as the growth driver and some others don't. This study attempted to scrutinize the causal association of FDI with GDP in Indonesia, India, Malaysia and Bangladesh for the years of 1990 to 2014. Cointegration test has been applied in this study which shows that there is a long-term interrelationship within FDI and economic growth and then applied the Granger causality (GC) test which is based on the VECM. The short run results show that there are no evidence of causality direction from FDI to GDP and vice versa, whereas the long run results show that there is a positive impact of FDI and other variables to the GDP but not significant, and from GDP and other variables to FDI there is a negative interrelationship but significant. The results show the ambiguous interrelationship between FDI and economic growth.

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Foreign Direct Investment, Trade, and Economic Growth in MENA Countries: Empirical Analysis Using ARDL Bounds Testing Approach

Cited by 64 publications

References 28 publications

Modeling the nexus between coal consumption, FDI inflow and economic expansion: does industrialization matter in South Africa?

Modeling the nexus between coal consumption, FDI inflow and economic expansion: does industrialization matter in South Africa?

New insight into the causal linkage between economic expansion, FDI, coal consumption, pollutant emissions and urbanization in South Africa

Does Foreign Direct Investment Lead to Economic Growth? Evidences from Asian Developing Countries

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