In Search of Causal Relationship between FDI, GDP, and Energy Consumption - Evidence from China

Kuo, Kuo Cheng; Chang, Chi Ya; Chen, Mei Hui; Chen, Wei Yu

doi:10.4028/www.scientific.net/amr.524-527.3388

Cited by 9 publications

(7 citation statements)

References 17 publications

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“…In the long-run, we find that foreign capital inflows Granger cause output growth and as a result, energy consumption Granger causes foreign capital inflows. Our results are consistent with Dube (2009) for South Africa and Kuo et al (2012) for China who report that foreign capital inflows (proxies by FDI) and energy consumption are complementary i.e. bidirectional causality exists.…”

Section: Resultssupporting

confidence: 91%

Is energy consumption sensitive to foreign capital inflows and currency devaluation in Pakistan?

2018

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This study investigates the relationship between foreign capital inflows and energy consumption by incorporating economic growth, exports and currency devaluation in energy demand function for the case of Pakistan. The long-run and short-run effects are examined via ARDL bounds testing procedure. Foreign capital inflows and currency devaluation (economic growth and exports) decrease (increase) energy consumption in long-run. The results confirm a feedback effect between foreign capital inflows and energy consumption. These findings would be helpful to policy makers in designing comprehensive economic and energy policies for utilizing foreign capital inflows as a tool for optimal use of energy sources to enhance economic development in long run.

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Section: Resultssupporting

confidence: 91%

Is energy consumption sensitive to foreign capital inflows and currency devaluation in Pakistan?

2018

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“…Finally, we concluded that there is a causality nexus from FDI to EC in Turkey based on Granger's (1969) linear causality test results, while the model of Dicks and Panchenko (2006) showed that there was no causality nexus between variables. Although the studies of Kuo et al (2012), Li and Qi (2016), Lin and Benjamin (2018), Wang and Jiayu (2019), Udemba et al (2020), Bujari and Martinez (2021), and Amoaka and Insaidoo (2021) examines different countries or country groups, the results we obtained are in line with these results.…”

Section: Discussionsupporting

confidence: 87%

Testing Linear and Nonlinear Relationships Between Foreign Direct Investment and Fossil Energy Consumption in Fragile Five Countries

Çelik¹

2023

ekoist

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The global warming and climate change problem is causing severe threats for the present and the future. The excessive utilization of fossil energy resources, especially on the production side, has contributed greatly to global warming by producing the greenhouse effect. In this respect, it is essential to assess the impact of foreign direct investment (FDI), which is expected to increase the production and employment of countries, on the utilization of fossil fuels. In this study, we investigate the relationship between FDI and fossil energy consumption (EC) utilizing such tests as: Johansen linear cointegration, Kapetanios, Shin, and Snell (2006) nonlinear cointegration, the linear Error Correction Model (ECM), Exponential Smooth Autoregressive (ESTAR) ECM, Granger (1969) linear causality, and Diks and Panchenko (2006) nonlinear causality. In this context, annual data covering the period between 1980 and 2020 are employed for the "Fragile Five" countries, which are: Brazil, Indonesia, India, Turkey, and South Africa. By applying the Augmented Dickey-Fuller (ADF) linear unit root test, we found that the series became stationary after taking the first difference. Following the unit root test results, Johansen's (1988) linear cointegration test results indicated that there existed a cointegration relationship from FDI to EC for Turkey and South Africa, while Kapetanios, Shin, and Snell's (2006) nonlinear cointegration test results revealed that there existed a cointegration relationship from FDI to EC in South Africa. In addition, the linear error correction model was proven to be valid for Turkey and South Africa, while the ESTAR nonlinear error correction model is valid only for Turkey. Finally, Granger's (1969) causality test results proved that there was a causal relationship from FDI to EC in Turkey. Dicks and Panchenko (2006) stated that there was no causal relationship between the variables.

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“…We stress that there is a conceptual difference between causality and correlation (Liang, 2014;. The purpose of our study is not to make any statements in relation to establishing means of causality between FDI and Growth, as in Borensztein et al (1998), Nair-Reichert and Weinhold (2001), Zhang (2001), Choe (2003), Kuo et al (2003), Hoekman and Javorcik (2004), Li and Liu (2005), De Gregorio (2005), Hansen and Rand (2006), Mah (2010) nor "strict local effects" (Brambilla et al, 2009;Long, 2011, Wang et al, 2013), for example. This is much discussed elsewhere as this non-exhaustive list of references may indicate.…”

Section: Introductionmentioning

confidence: 93%

Evidence for Gross Domestic Product growth time delay dependence over Foreign Direct Investment. A time-lag dependent correlation study

Ausloos

Eskandary

Kaur

et al. 2019

Physica A: Statistical Mechanics and its Applications

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This paper considers an often forgotten relationship, the time delay between a cause and its effect in economies and finance. We treat the case of Foreign Direct Investment (FDI) and economic growth, -measured through a country Gross Domestic Product (GDP). The pertinent data refers to 43 countries, over 1970-2015, -for a total of 4278 observations. When countries are grouped according to the Inequality-Adjusted Human Development Index (IHDI), it is found that a time lag dependence effect exists in FDI-GDP correlations. This is established through a time-dependent Pearson 's product-moment correlation coefficient matrix. Moreover, such a Pearson correlation coefficient is observed to evolve 1 arXiv:1905.01617v1 [q-fin.GN] 5 May 2019 from positive to negative values depending on the IHDI, from low to high. It is "politically and policy "relevant" that the correlation is statistically significant providing the time lag is less than 3 years. A "rank-size" law is demonstrated. It is recommended to reconsider such a time lag effect when discussing previous analyses whence conclusions on international business, and thereafter on forecasting.

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In Search of Causal Relationship between FDI, GDP, and Energy Consumption - Evidence from China

Cited by 9 publications

References 17 publications

Is energy consumption sensitive to foreign capital inflows and currency devaluation in Pakistan?

Is energy consumption sensitive to foreign capital inflows and currency devaluation in Pakistan?

Testing Linear and Nonlinear Relationships Between Foreign Direct Investment and Fossil Energy Consumption in Fragile Five Countries

Evidence for Gross Domestic Product growth time delay dependence over Foreign Direct Investment. A time-lag dependent correlation study

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