The interaction among FDI, trade openness, and economic growth in Asian economies

Must. Ayesha Shahrin and Saeed Sazzad Jeris

International Journal of Economics and Business Research, 2024, vol. 28, issue 2, 202-218

Abstract: This research analyses the correlation between foreign direct investment, trade openness, and economic growth in ten Asian nations from 1980 to 2019. ARDL bound and Granger causality tests have been utilised to evaluate both the short-run and long-run correlations among foreign direct investment, trade openness, and economic growth. The findings show that foreign direct investment and trade openness influence the growth of all economies in the long run except for the Philippines, Thailand, and Singapore. Trade openness and foreign direct investment are also crucial to boosting the economy in the short term. Also, trade openness has a short-term casual correlation with economic growth in Bangladesh, China, and Thailand, where the trade of the Korea Republic, Singapore, and Hong Kong largely depends on GDP growth in the short run. However, trade openness does not have a long-run association with economic growth in Asian countries apart from Thailand and Hong Kong.

Keywords: economic growth; foreign direct investment; trade openness; ARDL; bound test; Granger causality; FDI. (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:ids:ijecbr:v:28:y:2024:i:2:p:202-218

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