The Short and Long Run Effect of Domestic Investment, Foreign Direct Investment and Renewable Energy on Economic Development: Evidence from Cameroon
Nges Shamaine Afumbom (),
Mah-Soh Glenice Fosah () and
Gildas Dinga ()
Asian Development Policy Review, 2020, vol. 8, issue 4, 340-350
The purpose of this paper is to examine the short and long-run effect of domestic investment, foreign direct investment and renewable energy on economic development in Cameroon. To achieve this, the study makes use of the Autoregressive Distributed Lag Model and Bound test for co‐integration to establish the short and long‐run relationships. The results show that in the short‐run domestic investment and renewable energy both have a positive and significant effect on economic development while foreign direct investment has a negative but significant effect on economic growth. The long‐run equilibrium shows a significant and positive relationship between domestic investment and foreign direct investment on economic development while population growth rate and renewable energy show a negative relationship with economic growth. Official development aid inflow is found to positively affect economic development. However, this finding is seen to be statistically insignificant. The study therefore recommends that the state should continually encourage domestic savings, grant investment incentives as well as improved infrastructural facilities to spur the investment level and consequently economic development. Furthermore, the government should improve the business environment, set up a facilitating structure for both foreign and domestic investors and free movement of capital flows to attract FDI, which raises economic growth hence development.
Keywords: Domestic investment; Foreign direct investment; Renewable energy; Economic development; Short; Long run dynamics; ARDL-appraoch. (search for similar items in EconPapers)
References: Add references at CitEc
Citations: Track citations by RSS feed
Downloads: (external link)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:asi:adprev:v:8:y:2020:i:4:p:340-350:id:223
Access Statistics for this article
More articles in Asian Development Policy Review from Asian Economic and Social Society
Bibliographic data for series maintained by Robert Allen ().