Original scientific paper
https://doi.org/10.1080/1331677X.2016.1164922
Foreign direct investment, exports and economic growth: evidence from two panels of developing countries
Majid Mahmoodi
orcid.org/0000-0002-1728-8245
Elahe Mahmoodi
Abstract
The purpose of this article is to examine the causal relationship
between foreign direct investment (FDI), exports and economic
growth in two panels of developing countries (eight European
developing countries and eight Asian developing countries). Panel-
VECM causality is employed for investigating a tri-variate model of
FDI, exports and GDP. Causality results in the European developing
panel indicate bidirectional causality between GDP and FDI, and
unidirectional causality from GDP and FDI to exports in the shortrun.
The empirical results of the Asian developing panel indicate
bidirectional causality between exports and economic growth in
the short-run. Moreover, there is evidence of long-run causality from
export and FDI to economic growth, and long-run causality from
economic growth and export to FDI for both of the aforementioned
panels.
Keywords
Foreign direct investment (FDI); export; economic growth; panel causality
Hrčak ID:
171778
URI
Publication date:
22.12.2016.
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