Lead-lag association between foreign flows and economic growth in selected emerging economies

Vijender Pal Saini and Ravinder

International Journal of Indian Culture and Business Management, 2022, vol. 27, issue 1, 125-138

Abstract: The paper examines the ties between foreign inflows and economic growth in emerging economies, namely Brazil, China, Russia and India over the period of 1992-2019. Vector error correction method (VECM) and Granger causality test are used to understand the long and short dynamics between foreign inflows (FDI) and economic growth. The empirical findings illustrate that both the variables are co-moving in the long run for India and China while there is no cointegration existing in Brazil and Russia. The results of VECM disclose that there is bidirectional causality between FDI and economic growth in India while unidirectional causality in China. However, in the short run, there is unidirectional causality in India, China and Brazil and there is no connection existing amid foreign direct inflows and economic growth in Russia. The present research paper will be enormously helpful to the regulators and policymakers of selected emerging economies in planning their foreign inflows procedures.

Keywords: emerging economies; foreign direct investment; FDI; economic growth; causal relationship. (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:ids:ijicbm:v:27:y:2022:i:1:p:125-138

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