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The Impact of Foreign Direct Investment, Capital Formation, Inflation, Money Supply and Trade Openness on Economic Growth of Asian Countries

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  • Xiuyun Yang
  • Muhammad Nouman Shafiq

    (Xi’an Jiaotong University, Xi’an, Shaanxi Province, 710061, P.R. China.)

Abstract

Economic growthis currently anessential phenomenonfor emerging countries worldwide and has gained the researchers' intentions. Thus, the current study aims toexamine the role of foreign direct investment (FDI), capital formation, inflation, money supply, and trade openness on the economic growthof Asian countries. The data has been extracted from the twenty emerging Asian countries from 2007 to2018 using the most popular database named World Development Indicators(WDI). The fixed-effectsmodel, along with the robust standard error, has been used for checking the impact of predictorson the economic growthof Asian countries. The results revealed that the predictorssuch as FDI, capital formation, money supply, and trade openness havepositive association with economic growth, while inflation has a negative association with the economic growthof Asian countries. These findings are suitable for the new arrivals who want to examine this area in the future and for the regular traders who want todevelop policies related toeconomic growth.

Suggested Citation

  • Xiuyun Yang & Muhammad Nouman Shafiq, 2020. "The Impact of Foreign Direct Investment, Capital Formation, Inflation, Money Supply and Trade Openness on Economic Growth of Asian Countries," iRASD Journal of Economics, International Research Alliance for Sustainable Development (iRASD), vol. 2(1), pages 25-34, June.
    • Handle: RePEc:ani:irdjoe:v:2:y:2020:i:1:p:25-34
    DOI: https://doi.org/10.52131/joe.2020.0101.0013
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    Cited by:

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    2. Syed Imran Rais & Abdul Mansoor & Noman Ahmed & Syed Tahir Hussain Shah & Baserat Sultana, 2021. "Relationship between Emissions of Carbon Dioxide from the Cement Industry, Health Expenditures and Economic Growth in Pakistan," iRASD Journal of Economics, International Research Alliance for Sustainable Development (iRASD), vol. 3(2), pages 133-142, Septermbe.
    3. Ashiru Ibrahim & Michael Rabiu Abdulmalik, 2023. "Do trade openness and governance matter for economic growth in Africa? A case of EAC and WAEMU countries," International Economics and Economic Policy, Springer, vol. 20(3), pages 389-412, July.
    4. Bolor Khurelchuluun & Liang Cao & Wenshou Yan, 2023. "The Impact of Trade Openness on Economic Growth in Landlocked Developing Countries," International Journal of Science and Business, IJSAB International, vol. 28(1), pages 84-97.
    5. Sarwar Khan & Mahwish Zafar & Sana Khizer, 2022. "Nexuses between Governance Quality on Industrial Growth: A Fresh Insight from Developing Economies," iRASD Journal of Economics, International Research Alliance for Sustainable Development (iRASD), vol. 4(1), pages 1-13, March.
    6. Ismat Nasim & Mohamed Boukhris & Umar Nawaz Kayani & Farrukh Bashir & Syed Arslan Haider, 2023. "Exploring the Links between Renewable Energy, FDI, Environmental Degradation, and International Trade in Selected Developing Countries," International Journal of Energy Economics and Policy, Econjournals, vol. 13(6), pages 418-429, November.
    7. Atif khan Jadoon & Syeda Azra Batool & Ambreen Sarwar & Maria Faiq Javaid & Dur a Shahwar, 2021. "An Investigation into the Channel of Public Expenditure to Boost Industrial Productivity in Pakistan," iRASD Journal of Economics, International Research Alliance for Sustainable Development (iRASD), vol. 3(2), pages 93-105, September.
    8. Dr. Ameenullah Aman & Dr. Usman Ahmad & Sumera Muhammad Saleem, 2021. "Investigating the Link Between Macroeconomic Factors and Income Inequality of Asian Countries," iRASD Journal of Economics, International Research Alliance for Sustainable Development (iRASD), vol. 3(3), pages 376-387, December.

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    More about this item

    Keywords

    Foreign direct investment; Capital formation; Inflation; Money supply; Trade openness; Economic growth; Asian countries;
    All these keywords.

    JEL classification:

    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • E51 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Money Supply; Credit; Money Multipliers
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • P33 - Political Economy and Comparative Economic Systems - - Socialist Institutions and Their Transitions - - - International Trade, Finance, Investment, Relations, and Aid

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