Foreign Direct Investment and Economic Growth: Evidence from Iran and GCC

Fateh Habibi () and Mohammad Sharif Karimi ()
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Fateh Habibi: Department of Economics, University of Kurdistan, Kurdistan, Iran.
Mohammad Sharif Karimi: Department of Economics, Razi University, Kermanshah, Iran.

Iranian Economic Review (IER), 2017, vol. 21, issue 3, 601-620

Abstract: FDI can create employment and reduce poverty, increase the host country’s export capacity causing the developing country to increase its foreign exchange earnings. The aim of this study is to investigate whether FDI affect economic growth in GCC countries over the period 1980-2014 using ARDL approaches. The empirical results show that the FDI is one of the major drivers of economic growth in Iran and GCC countries. The result of bound test indicates that there is a long-run steady-state relationship between FDI and GDP in Iran and for individual country of GCC. Also results of Granger-causality test imply that a bidirectional causalities from FDI to real GDP growth in Qatar, Saudi Arabia and UAE; unidirectional causalities from FDI to real GDP growth rate in Iran and Bahrain and no causality between FDI and real GDP growth rate in Kuwait and Oman.

Keywords: FDI; Economic Growth; ARDL; Iran; GCC. (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:eut:journl:v:21:y:2017:i:3:p:601

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