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Foreign Direct Investment and Growth Relationship in Georgia

Faruk Gürsoy and Huseyin Kalyoncu
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Faruk Gürsoy: International Black Sea University, Tbilisi, Georgia.

International Journal of Economics and Financial Issues, 2012, vol. 2, issue 3, 267-271

Abstract: This paper aims to investigate the empirically the impact of FDI on economic growth of Georgia over the period of 1997-2010. The Engle-Granger cointegration and Granger causality tests are used in order to analyse the causal relationship between FDI and economic growth. It is crucial to see the directions of causality between two variables for the policy makers to encourage private sectors. It is found that these two variables are cointegrated. Our empirical findings suggest that it is FDI that causes GDP in the case of Georgia.

Keywords: Economic growth; Foreign direct investment; Granger causality (search for similar items in EconPapers)
JEL-codes: C32 F21 O4 (search for similar items in EconPapers)
Date: 2012
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