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The relationship between foreign direct investment, financial development and growth economic in Next-11 Countries: a PMG/ARDL estimation

Author

Listed:
  • Louail Bilal

    (Ph.D., College of Business Administration, Northern Border University, Arar, Saudi Arabia and Faculty of Economic, Commercial and Management Sciences, University of M’Hamed BOUGARA Boumerdes, Algeria)

  • Zouita Mohamed Salah

    (Ph.D., Faculty of Economic, Commercial and Management Sciences, University of M’Hamed BOUGARA Boumerdes, Algeria)

Abstract

This study investigates the relationship between FDI, economic growth and financial development in the Next 11 countries. An analysis of the results was performed accordingly on the panel data gathered from the Next 11 countries from 1985 to 2019— using the Pooled Mean Group (PMG) estimation method and the Autoregressive Distributed Lag model approach (ARDL). The results indicate an impact of both economic growth and financial development on the FDI flows to the study of countries during the period between 1985 and 2019 in the long run, while no such proof is affirmed in the short run. This study’s contribution provides a better understanding of the dynamic relationship between FDI, economic growth, and financial development by providing decision-makers to understand the nature of the dynamic association between the study variables. This study provides empirical evidence about the association between inflows of FDI, economic growth and financial development within the context of the Next-11 countries. The previous literature lacks empirical study on the relationship between variables of study for the Next-11 countries.

Suggested Citation

  • Louail Bilal & Zouita Mohamed Salah, 2021. "The relationship between foreign direct investment, financial development and growth economic in Next-11 Countries: a PMG/ARDL estimation," Management, Sciendo, vol. 25(1), pages 28-50, January.
    • Handle: RePEc:vrs:manmen:v:25:y:2021:i:1:p:28-50:n:2
    DOI: 10.2478/manment-2019-0058
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    More about this item

    Keywords

    Foreign Direct Investment; Financial Development Growth Economic; Next-11 Countries;
    All these keywords.

    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • F34 - International Economics - - International Finance - - - International Lending and Debt Problems

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