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Foreign direct investment, exports and economic growth: evidence from two panels of developing countries

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  • Majid Mahmoodi
  • 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 short-run. 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.

Suggested Citation

  • Majid Mahmoodi & Elahe Mahmoodi, 2016. "Foreign direct investment, exports and economic growth: evidence from two panels of developing countries," Economic Research-Ekonomska Istraživanja, Taylor & Francis Journals, vol. 29(1), pages 938-949, January.
    • Handle: RePEc:taf:reroxx:v:29:y:2016:i:1:p:938-949
    DOI: 10.1080/1331677X.2016.1164922
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    Cited by:

    1. El Weriemmi, Malek & Bakari, Sayef, 2024. "Impacts of Agricultural Exports and CO2 Emissions on Economic Growth: New Evidence from High Income Countries," MPRA Paper 121697, University Library of Munich, Germany.
    2. N.M. Odhiambo, 2021. "Foreign Direct Investment and Economic Growth in Kenya: An Empirical Investigation," Working Papers AESRI-2021-04, African Economic and Social Research Institute (AESRI), revised Jan 2021.
    3. El Weriemmi, Malek & Bakari, Sayef, 2024. "Impacts of Agricultural Exports and CO2 Emissions on Economic Growth: New Evidence from High Income Countries," MPRA Paper 121888, University Library of Munich, Germany.
    4. Ben Yedder, Nadia & El Weriemmi, Malek & Bakari, Sayef, 2023. "Boosting Economic Growth in Angola: Unveiling the Dynamics of Domestic Investments and Exports," MPRA Paper 119480, University Library of Munich, Germany.
    5. Aina B. Aidarova & Gulshat Abdimutalipovna Zhadigerova & Ainur Abilkassym & Lyailya Abdybayevna Baibulekova & Dina B. Balabekova & Saule A. Ilasheva, 2023. "Analysis of the Relationship between Energy Consumption, Foreign Direct Investment, and Labor Force Participation by Vector Error Correction Model: The Case of Kazakhstan," International Journal of Energy Economics and Policy, Econjournals, vol. 13(5), pages 108-114, September.
    6. Abdul Rehman & Hengyun Ma & Sufyan Ullah Khan & Muntasir Murshed & Muhammad Kamran Khan & Fayyaz Ahmad & Muhammad Zubair Chishti, 2023. "Do Exports of Communication Technology, Food, Manufacturing, and Foreign Investments Foster Economic Growth in Pakistan? an Exploration From Asymmetric Technique," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 14(4), pages 4238-4255, December.
    7. Ishfaq Hamid & Md Shabbir Alam & Imran Ali Baig & Pabitra Kumar Jena, 2024. "Nexus Between Institutional Quality and Foreign Direct Investment Inflows: Panel Data Analysis of SAARC Countries," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 15(2), pages 7993-8019, June.
    8. Ghouma Ghouma & Hamdi Becha & Maha Kalai & Kamel Helali & Myriam Ertz, 2023. "Do IFRS Disclosure Requirements Reduce the Cost of Equity Capital? Evidence from European Firms," JRFM, MDPI, vol. 16(8), pages 1-19, August.

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