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The Impact of Domestic and Foreign Direct Investment on Economic Growth: Fresh Evidence from Tunisia

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  • Bouchoucha, Najeh
  • Bakari, Sayef

Abstract

This paper aims to analyze the impact of domestic investment and Foreign Direct Investment on economic growth in Tunisia during the period 1976–2017. This study is based on the Auto-Regressive Distributive Lags (ARDL) approach that is proposed by Pesaran et al (2001). Bound testing approaches to the analysis of level relationships. According to the results of the analysis, domestic investment and foreign direct investment have a negative effect on economic growth in the long run. However, in the short run, only domestic investment causes economic growth. The findings are important for Tunisian economic policy makers to undertake the effective policies that can promote and lead domestic and foreign investments to boost economic growth.

Suggested Citation

  • Bouchoucha, Najeh & Bakari, Sayef, 2019. "The Impact of Domestic and Foreign Direct Investment on Economic Growth: Fresh Evidence from Tunisia," MPRA Paper 94777, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:94777
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    References listed on IDEAS

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    1. Sayef Bakari & Sofien Tiba, 2019. "The Impact of Trade Openness, Foreign Direct Investment and Domestic Investment on Economic Growth: New Evidence from Asian Developing Countries," Economic Research Guardian, Mutascu Publishing, vol. 9(1), pages 46-54, June.
    2. Sayef Bakari & Mohamed Mabrouki & Asma Elmakki, 2018. "The Impact of Domestic Investment in the Industrial Sector on Economic Growth with Partial Openness: Evidence from Tunisia," Economics Bulletin, AccessEcon, vol. 38(1), pages 111-128.
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    11. Bakari, Sayef, 2018. "The Impact of Domestic Investment on Economic Growth New Policy Analysis from Algeria," Bulletin of Economic Theory and Analysis, BETA Journals, vol. 3(1), pages 35-51, March.
    12. Mounir Belloumi & Atef Alshehry, 2018. "The Impacts of Domestic and Foreign Direct Investments on Economic Growth in Saudi Arabia," Economies, MDPI, vol. 6(1), pages 1-17, March.
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    19. Xu Gang & Wang Ruifang, 2007. "The Effect of Foreign Direct Investment on Domestic Capital Formation, Trade, and Economic Growth in a Transition Economy: Evidence from China," Global Economy Journal, De Gruyter, vol. 7(2), pages 1-23, June.
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    Cited by:

    1. Mkadmi, Jamel Eddine & Bakari, Sayef & Othmani, Ameni, 2021. "The Impact of Tax Revenues and Domestic Investments on Economic Growth in Tunisia," MPRA Paper 108387, University Library of Munich, Germany.
    2. Sayef Bakari & Sofien Tiba, 2022. "Agricultural Exports, Agricultural Imports And Economic Growth In China," Journal of Smart Economic Growth, , vol. 7(3), pages 35-61, September.
    3. Bakari, Sayef & Fakraoui, Nissar & Mabrouki, Mohamed, 2020. "The Contribution of Domestic Investment, Exports and Imports on Economic Growth: A Case Study of Peru," MPRA Paper 99041, University Library of Munich, Germany.
    4. Sayef Bakari & Sofien Tiba & Nissar Fakraoui, 2019. "Does Domestic Investment Contribute To Economic Growth In Uruguay? What Did The Empirical Facts Say?," Journal of Smart Economic Growth, , vol. 4(2), pages 53-69, September.
    5. repec:aly:journl:202188 is not listed on IDEAS
    6. Bakari, Sayef & El Weriemmi, Malek, 2022. "Causality between Domestic Investment and Economic Growth in Arab Countries," MPRA Paper 113079, University Library of Munich, Germany.
    7. Bakari, Sayef, 2022. "The Nexus between Domestic Investment and Economic Growth in Developed Countries: Do Exports matter?," MPRA Paper 114394, University Library of Munich, Germany.
    8. Sayef Bakari & Nissar Fakraoui & Sofien Tiba, 2021. "Domestic Investment, Export, Import And Economic Growth In Brazil: An Application Of Vector Error Correction Model," Journal of Smart Economic Growth, , vol. 6(1), pages 31-48, Mars.
    9. Bakari, Sayef, 2022. "The Impact of Digitalization and Patent on Economic Growth in Romania," MPRA Paper 113951, University Library of Munich, Germany.
    10. Bakari, Sayef & El Weriemmi, Malek, 2022. "Exploring the Impact of Agricultural Investment on Economic Growth in France," MPRA Paper 113970, University Library of Munich, Germany.
    11. Nadia Ben Yedder & Malek El Weriemmi & Sayef Bakari, 2023. "The Impact of Domestic Investment and Trade on Economic Growth in North Africa Countries: New Evidence from Panel CS-ARDL Model," EuroEconomica, Danubius University of Galati, issue 2(42), pages 22-41, November.
    12. Mkadmi, Jamel Eddine & Bakari, Sayef & Msai, Achwak, 2021. "Assessing the Impact of Tax Policies on Economic Growth in Tunisia: New Empirical and Policy Analysis," MPRA Paper 109023, University Library of Munich, Germany.
    13. Bakari, Sayef & El Weriemmi, Malek & Mabrouki, Mohamed, 2022. "The Impact of Digitalization and Trade Openness on Economic Growth: New Evidence from Richest Asian Countries," MPRA Paper 113816, University Library of Munich, Germany.
    14. El Weriemmi, Malek & Bakari, Sayef, 2024. "The Impact of CO2 Emissions, Domestic Investment and Trade Openness on Economic Growth: New Evidence from North African Countries," MPRA Paper 122152, University Library of Munich, Germany.
    15. Bakari, Sayef, 2022. "The Impact of Natural resources, CO2 Emission, Energy use, Domestic Investment, Innovation, Trade and Digitalization on Economic growth: Evidence from 52 African Countries," MPRA Paper 114323, University Library of Munich, Germany.
    16. Bakari, Sayef, 2022. "Relationship among Domestic Investment, Exports and Economic Growth: Evidence form the Case of Greece," MPRA Paper 114418, University Library of Munich, Germany.
    17. Bakari, Sayef, 2024. "Link among Domestic Investments, Exports and Economic Growth: New Evidence from Australia," MPRA Paper 121604, University Library of Munich, Germany.
    18. Bakari, Sayef, 2021. "Reinvest the relationship between exports and economic growth in African countries: New insights from innovative econometric methods," MPRA Paper 108785, University Library of Munich, Germany.
    19. Bakari, Sayef, 2024. "Causality between Domestic Investment and Economic Growth: New Evidence from Argentina," MPRA Paper 121799, University Library of Munich, Germany.

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    More about this item

    Keywords

    Domestic investment; Foreign Direct Investment; Economic Growth; Tunisia; ARDL.;
    All these keywords.

    JEL classification:

    • F11 - International Economics - - Trade - - - Neoclassical Models of Trade
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • O55 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Africa

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