The impact of FDI on economic growth in Eurozone countries

Panagiotis Pegkas

The Journal of Economic Asymmetries, 2015, vol. 12, issue 2, 124-132

Abstract: The purpose of the study is twofold: Firstly, to analyze the relationship between the foreign direct investments and economic growth and secondly, to estimate the effect of foreign direct investments on economic growth in the Eurozone countries over the period of 2002–2012. The paper employs panel data estimations to test the relationship between the variables. The empirical analysis reveals that there is a positive long-run cointegrating relationship between FDI stock and economic growth. By using the Fully Modified OLS (FMOLS) and Dynamic OLS (DOLS) methods the elasticity of GDP with respect to FDI is 0.054% and 0.147%, respectively. The results also indicate that the stock of foreign direct investment is a significant factor that positively affects economic growth in the Eurozone countries.

Keywords: Economic growth; FDI; Eurozone; Panel data (search for similar items in EconPapers)
JEL-codes: C33 F21 O11 O40 (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (60)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:joecas:v:12:y:2015:i:2:p:124-132

DOI: 10.1016/j.jeca.2015.05.001

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