IDEAS home Printed from https://ideas.repec.org/a/taf/irapec/v26y2012i1p83-96.html
   My bibliography  Save this article

Correlates of economic growth in developing countries: a panel cointegration approach

Author

Listed:
  • James P. Neelankavil
  • Lonnie K. Stevans
  • Francisco L. Roman

Abstract

The inflow of foreign direct investment (FDI) has been found to play a crucial role in the economic growth of receiving countries. Using panel cointegration techniques, this perception was found to be mitigated by an empirical approach that yields different results from previous studies. While the growth in real FDI has an influence on real GDP growth across developing countries in the short-run, year-to-year periods, it does not explain real GDP in the long-run. Rather, it appears to be the economic factors internal to a country that have the most influence on real GDP over time: human capital (measured by literacy rates), export trade, and monetary and fiscal policy.

Suggested Citation

  • James P. Neelankavil & Lonnie K. Stevans & Francisco L. Roman, 2012. "Correlates of economic growth in developing countries: a panel cointegration approach," International Review of Applied Economics, Taylor & Francis Journals, vol. 26(1), pages 83-96, January.
    • Handle: RePEc:taf:irapec:v:26:y:2012:i:1:p:83-96
    DOI: 10.1080/02692171.2011.557048
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/02692171.2011.557048
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/02692171.2011.557048?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Muzafar Habibullah & Yoke-Kee Eng, 2006. "Does Financial Development Cause Economic Growth? A Panel Data Dynamic Analysis for the Asian Developing Countries," Journal of the Asia Pacific Economy, Taylor & Francis Journals, vol. 11(4), pages 377-393.
    2. Peter C. B. Phillips & Bruce E. Hansen, 1990. "Statistical Inference in Instrumental Variables Regression with I(1) Processes," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 57(1), pages 99-125.
    3. Choong, Chee-Keong & Baharumshah, Ahmad Zubaidi & Yusop, Zulkornain & Habibullah, Muzafar Shah, 2010. "Private capital flows, stock market and economic growth in developed and developing countries: A comparative analysis," Japan and the World Economy, Elsevier, vol. 22(2), pages 107-117, March.
    4. Kaddour Hadri, 2000. "Testing for stationarity in heterogeneous panel data," Econometrics Journal, Royal Economic Society, vol. 3(2), pages 148-161.
    5. Hristos Doucouliagos & Martin Paldam, 2005. "Aid Effectiveness on Growth. A Meta Study," Economics Working Papers 2005-13, Department of Economics and Business Economics, Aarhus University.
    6. Alfaro, Laura & Chanda, Areendam & Kalemli-Ozcan, Sebnem & Sayek, Selin, 2004. "FDI and economic growth: the role of local financial markets," Journal of International Economics, Elsevier, vol. 64(1), pages 89-112, October.
    7. Don Bredin & John Elder & Stilianos Fountas, 2009. "Macroeconomic Uncertainty and Performance in Asian Countries," Review of Development Economics, Wiley Blackwell, vol. 13(2), pages 215-229, May.
    8. Marwan Abdul-Malik Thanoon & Ahmad Zubaidi Baharumshah & Abd. Aziz Abd. Rahman, 2006. "Malaysia: from economic recovery to sustained economic growth," Journal of Post Keynesian Economics, M.E. Sharpe, Inc., vol. 28(2), pages 295-315, January.
    9. Kao, Chihwa, 1999. "Spurious regression and residual-based tests for cointegration in panel data," Journal of Econometrics, Elsevier, vol. 90(1), pages 1-44, May.
    10. Im, Kyung So & Pesaran, M. Hashem & Shin, Yongcheol, 2003. "Testing for unit roots in heterogeneous panels," Journal of Econometrics, Elsevier, vol. 115(1), pages 53-74, July.
    11. Asteriou, Dimitrios, 2009. "Foreign aid and economic growth: New evidence from a panel data approach for five South Asian countries," Journal of Policy Modeling, Elsevier, vol. 31(1), pages 155-161.
    12. Kwabena Gyimah-Brempong & Samaria de Gyimah-Brempong, 2006. "Corruption, Growth, and Income Distribution: Are there Regional Differences?," Economics of Governance, Springer, vol. 7(3), pages 245-269, August.
    13. Brian Snowdon, 2009. "The Solow Model, Poverty Traps, and the Foreign Aid Debate," History of Political Economy, Duke University Press, vol. 41(5), pages 241-262, Supplemen.
    14. Bengoa, Marta & Sanchez-Robles, Blanca, 2005. "Policy shocks as a source of endogenous growth," Journal of Policy Modeling, Elsevier, vol. 27(2), pages 249-261, March.
    15. Enisan, Akinlo A. & Olufisayo, Akinlo O., 2009. "Stock market development and economic growth: Evidence from seven sub-Sahara African countries," Journal of Economics and Business, Elsevier, vol. 61(2), pages 162-171.
    16. Benson Durham, J., 2002. "The effects of stock market development on growth and private investment in lower-income countries," Emerging Markets Review, Elsevier, vol. 3(3), pages 211-232, September.
    17. Rahim Quazi, 2007. "Economic Freedom and Foreign Direct Investment in East Asia," Journal of the Asia Pacific Economy, Taylor & Francis Journals, vol. 12(3), pages 329-344.
    18. Engle, Robert & Granger, Clive, 2015. "Co-integration and error correction: Representation, estimation, and testing," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 39(3), pages 106-135.
    19. Ambe Njoh, 2008. "Implications of Africa’s Transportation Systems for Development in the Era of Globalization," The Review of Black Political Economy, Springer;National Economic Association, vol. 35(4), pages 147-162, December.
    20. Panicos Demetriades & Siong Hook Law, 2006. "Finance, institutions and economic development," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 11(3), pages 245-260.
    21. Adams, Samuel, 2009. "Foreign Direct investment, domestic investment, and economic growth in Sub-Saharan Africa," Journal of Policy Modeling, Elsevier, vol. 31(6), pages 939-949, November.
    22. Jonathan Batten & Xuan Vinh Vo, 2009. "An analysis of the relationship between foreign direct investment and economic growth," Applied Economics, Taylor & Francis Journals, vol. 41(13), pages 1621-1641.
    23. Shujie Yao, 2006. "On economic growth, FDI and exports in China," Applied Economics, Taylor & Francis Journals, vol. 38(3), pages 339-351.
    24. Levin, Andrew & Lin, Chien-Fu & James Chu, Chia-Shang, 2002. "Unit root tests in panel data: asymptotic and finite-sample properties," Journal of Econometrics, Elsevier, vol. 108(1), pages 1-24, May.
    25. Burke, Paul J. & Ahmadi-Esfahani, Fredoun Z., 2006. "Aid and growth: A study of South East Asia," Journal of Asian Economics, Elsevier, vol. 17(2), pages 350-362, April.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Gulmira Issayeva & Elmira Y. Zhussipova & Galimzhan A. Pazilov, 2024. "Examining the Environmental Kuznets Curve Hypothesis in Energy, Agriculture, and Industry Sectors: The Case of Kazakhstan," International Journal of Energy Economics and Policy, Econjournals, vol. 14(4), pages 1-11, July.
    2. Hafner, Kurt A. & Mayer-Foulkes, David, 2013. "Fertility, economic growth, and human development causal determinants of the developed lifestyle," Journal of Macroeconomics, Elsevier, vol. 38(PA), pages 107-120.
    3. Samia Nasreen, 2021. "Association between health expenditures, economic growth and environmental pollution: Long‐run and causality analysis from Asian economies," International Journal of Health Planning and Management, Wiley Blackwell, vol. 36(3), pages 925-944, May.
    4. Sieng, Lai Wei & Yussof, Ishak, 2014. "Human Capital Accumulation and Economic Growth in Malaysia - Investigating the Long Run Nexus," Jurnal Ekonomi Malaysia, Faculty of Economics and Business, Universiti Kebangsaan Malaysia, vol. 48(1), pages 155-165.
    5. Saken Ualikhanovich Abdibekov & Yelena Evgenevna Gridneva & Gulnar Shaimardanovna Kaliakparova & Nazigul Amankeldikyzy Amankeldi & Gulmira Amangeldiyevna Perneyeva & Bauyrzhan Susaruly Kulbay & Kundyz, 2024. "The Relationship between Energy Consumption, Agricultural and Industrial Production, and Economic Growth: ARDL Border Value Approach in the Case of Kazakhstan," International Journal of Energy Economics and Policy, Econjournals, vol. 14(3), pages 79-86, May.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Chebli Mongi & Kais Saidi, 2024. "The Impact of Corruption, Government Effectiveness, FDI, and GFC on Economic Growth: New Evidence from Global Panel of 48 Middle-Income Countries," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 15(3), pages 10696-10721, September.
    2. Carlos Alberto Barreto Nieto & Jacobo Campo Robledo, 2012. "Relación a largo plazo entre consumo de energía y PIB en América Latina: Una evaluación empírica con datos panel," Revista Ecos de Economía, Universidad EAFIT, October.
    3. Alessio Ciarlone, 2015. "House price cycles in emerging economies," Studies in Economics and Finance, Emerald Group Publishing Limited, vol. 32(1), pages 17-52, March.
    4. Angeliki N. Menegaki, 2019. "The ARDL Method in the Energy-Growth Nexus Field; Best Implementation Strategies," Economies, MDPI, vol. 7(4), pages 1-16, October.
    5. El-Shazly, Alaa, 2013. "Electricity demand analysis and forecasting: A panel cointegration approach," Energy Economics, Elsevier, vol. 40(C), pages 251-258.
    6. Manuel Ennes Ferreira & João Dias & Jelson Serafim, 2022. "Stock Market and Economic Growth: Evidence from Africa," Working Papers REM 2022/0228, ISEG - Lisbon School of Economics and Management, REM, Universidade de Lisboa.
    7. Mongi Chebli & Kais Saidi, 2024. "Economic Growth in Middle-Income Countries: The Role of Political Stability and Foreign Direct Investment," Journal of Quantitative Economics, Springer;The Indian Econometric Society (TIES), vol. 22(3), pages 641-665, September.
    8. Kahia, Montassar & Aïssa, Mohamed Safouane Ben & Lanouar, Charfeddine, 2017. "Renewable and non-renewable energy use - economic growth nexus: The case of MENA Net Oil Importing Countries," Renewable and Sustainable Energy Reviews, Elsevier, vol. 71(C), pages 127-140.
    9. Pedro M. G. Martins, 2010. "Aid Absorption and Spending in Africa: A Panel Cointegration Approach," Working Paper Series 1010, Department of Economics, University of Sussex Business School.
    10. Kahia, Montassar & Ben Aïssa, Mohamed Safouane & Charfeddine, Lanouar, 2016. "Impact of renewable and non-renewable energy consumption on economic growth: New evidence from the MENA Net Oil Exporting Countries (NOECs)," Energy, Elsevier, vol. 116(P1), pages 102-115.
    11. Bashiri Behmiri, Niaz & Pires Manso, José R., 2013. "How crude oil consumption impacts on economic growth of Sub-Saharan Africa?," Energy, Elsevier, vol. 54(C), pages 74-83.
    12. Ogali, Oscar I.O. & Okoro, Emeka E. & Olafuyi, Saburi G., 2023. "Assessing consensus on nexus between natural gas consumption and economic growth," Renewable and Sustainable Energy Reviews, Elsevier, vol. 187(C).
    13. Ciarlone, Alessio, 2011. "Housing wealth effect in emerging economies," Emerging Markets Review, Elsevier, vol. 12(4), pages 399-417.
    14. Campo Robledo, Jacobo, 2011. "Sostenibilidad fiscal: una aproximación con datos panel para 8 países Latinoaméricanos [Fiscal sustainability: A data panel approach for eight Latin American countries]," MPRA Paper 33091, University Library of Munich, Germany.
    15. Mariam Camarero & Cecilio Tamarit, 2003. "Estimating exports and imports demand for Manufactured goods: The role of FDI," European Economy Group Working Papers 22, European Economy Group.
    16. Sallahuddin Hassan & Zalila Othman & Mohd Zaini Abd Karim, 2011. "Private and Public Investment in Malaysia: A Panel Time-Series Analysis," International Journal of Economics and Financial Issues, Econjournals, vol. 1(4), pages 199-210.
    17. Khatereh SADEGHZADEH, 2018. "The effects of microeconomic factors on the stock market: A panel for the stock exchange in Istanbul ARDL analysis," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania / Editura Economica, vol. 0(3(616), A), pages 113-134, Autumn.
    18. Myo Myo Htike & Anil Shrestha & Makoto Kakinaka, 2022. "Investigating whether the environmental Kuznets curve hypothesis holds for sectoral CO2 emissions: evidence from developed and developing countries," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 24(11), pages 12712-12739, November.
    19. Robertson, Raymond & Kumar, Anil & Dutkowsky, Donald H., 2014. "Weak-form and strong-form purchasing power parity between the US and Mexico: A panel cointegration investigation," Journal of Macroeconomics, Elsevier, vol. 42(C), pages 241-262.
    20. Ibrahiem, Dalia M. & Hanafy, Shaimaa A., 2021. "Do energy security and environmental quality contribute to renewable energy? The role of trade openness and energy use in North African countries," Renewable Energy, Elsevier, vol. 179(C), pages 667-678.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:irapec:v:26:y:2012:i:1:p:83-96. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/CIRA20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.