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The effect of foreign direct investment (FDI) on economic growth: The case of AMU

Author

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  • Aicha Aouar

    (University Abou Bekr Belkaid, Faculty of Economy, Tlemcen, Algeria)

  • Asma Tahraoui

    (University Abou Bekr Belkaid, Faculty of Economy, Tlemcen, Algeria)

Abstract

This study analyses the impact of foreign direct investment (FDI) on economic growth (GDP) in the Arab Maghreb Union (AMU). For this purpose, it uses Angel Granger cointegration method for the period from 1980-2021. The estimation results show that these two variables are cointegrated. We found that FDI has a significant positive impact on economic growth, which confirms that FDI is an important factor in promoting Maghreb economic growth. The causality test show that there exists a directional causality from GDP to FDI in AMU.

Suggested Citation

  • Aicha Aouar & Asma Tahraoui, "undated". "The effect of foreign direct investment (FDI) on economic growth: The case of AMU," Review of Socio - Economic Perspectives 202326, Reviewsep.
    • Handle: RePEc:aly:journl:202326
    DOI: https://doi.org/10.19275/RSEP169
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    More about this item

    Keywords

    foreign direct investment; economic growth; Angel Granger cointegration; AMU.;
    All these keywords.

    JEL classification:

    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • F62 - International Economics - - Economic Impacts of Globalization - - - Macroeconomic Impacts
    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models

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