Are Technological Innovation and Foreign Direct Investment a Way to Boost Economic Growth? An Egyptian Case Study Using the Autoregressive Distributed Lag (ARDL) Model

Maha Mohamed Alsebai Mohamed, Pingfeng Liu and Guihua Nie
Additional contact information
Maha Mohamed Alsebai Mohamed: School of Economics, Wuhan University of Technology, Luoshi Road 122, Wuhan 430070, China
Pingfeng Liu: School of Economics, Wuhan University of Technology, Luoshi Road 122, Wuhan 430070, China
Guihua Nie: School of Economics, Wuhan University of Technology, Luoshi Road 122, Wuhan 430070, China

Sustainability, 2021, vol. 13, issue 6, 1-28

Abstract: Both technological innovation and foreign direct investment have received widespread attention in the literature on their role in promoting economic growth. Therefore, this study aims to test the relationship between foreign direct investment, technological innovation, and economic growth of the Egyptian economy during the period between 1990–2019 using the autoregressive distributed lag model simultaneous integration test. Our findings show of the ARDL (Autoregressive Distributed Lag) model estimation a joint complementary relationship between the rate of growth of per capita gross domestic product (GDP) in US dollars and the independent variables in the model in the long and short term, which are statistically significant results. We found a positive significant relationship between the variables of incoming foreign direct investment and share of total capital formation in economic growth. Therefore, in the long term, the rate of inflation and the innovation index had a negative impact in the long term and the speed of adjustment towards equilibrium was very large, as it was estimated at 1.5 years (1/0.651). Furthermore, the study also provides valuable lessons and a strategic vision for the Egyptian government, which aspires to advance technology and attract more foreign direct investment.

Keywords: ARDL model; economic growth; technological innovation; foreign direct investment; the Egyptian economy (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (12)

Downloads: (external link)
https://www.mdpi.com/2071-1050/13/6/3265/pdf (application/pdf)
https://www.mdpi.com/2071-1050/13/6/3265/ (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:gam:jsusta:v:13:y:2021:i:6:p:3265-:d:517813

Access Statistics for this article

Sustainability is currently edited by Ms. Alexandra Wu

More articles in Sustainability from MDPI
Bibliographic data for series maintained by MDPI Indexing Manager ().