Truth Behind Economic Performance, Natural Resources and Attracting Foreign Direct Investment

Arthelo Palma

Expert Journal of Economics, 2016, vol. 4, issue 2, 68-77

Abstract: Using a preliminary investigation and analysis on the latest data on GDP (Gross Domestic Product) performance, GOI (Global Opportunity Index), Vulnerability Score, Readiness Score, and the number of resources of economic importance, exploratory or preliminary SEM (structural equation modelling) was prompted on the recent available data of the 131 countries (n=131). The model was robust, addressing concerns about multivariate assumptions and other measures on the goodness of fit. It was found that the number of natural resources of economic importance plays a large role in the GDP performance. Thus, the preliminary symptom of Dutch disease continues to manifest for as long as each country aims for development, with their resources as ultimate enticing factors for foreign direct investment (FDI). In addition, economic growth is so far observed to be associated with the vulnerability of the country to climate change. Finally, economic growth was found to be linked to the negative impacts argued by the dependency theory. Implication on governance was discussed.

Keywords: GDP; FDI; vulnerability measure; readiness measure; resources (search for similar items in EconPapers)
JEL-codes: O10 O20 (search for similar items in EconPapers)
Date: 2016
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