Impact of Foreign Investment on Economic Growth in OECD’s Members: A Panel Data Model, 1977-2017

Francisco Venegas-Martínez (), Alí Aali-Bujari and Tomás Gómez-Rodríguez
Additional contact information
Francisco Venegas-Martínez: Instituto Politécnico Nacional, México
Authors registered in the RePEc Author Service: Francisco Venegas-Martínez

Journal of Reviews on Global Economics, 2019, vol. 8, 838-846

Abstract: Motivation: This paper is aimed at analyzing the impact of foreign investment (FI) on economic growth (EG) in Australia, Canada, Germany, Spain, Finland, France, United Kingdom, Greece, Italy, Japan, Republic of Korea, Mexico, Netherlands, Norway, New Zealand, and USA. Novelty: The research is: 1) concentrated in countries belonging to the OECD; 2) based on a greater number of countries, variables and periods; and 3) addressed to correcting multicollinearity and autocorrelation of data. Methodology: A Granger causality analysis is carried out and both static and dynamic panel data models are estimated. Data and Empirical Analysis: Data is obtained from World Bank for the period 1977-2017. The causality of Granger reveals that during the first 10 years there is a unidirectional relationship from FI toward EG. In the following 15 years, there is empirical evidence of a bidirectional causal relationship. Moreover, during the whole period of study, 7 years have a unidirectional causality from EG toward FI. Finally, estimates of both static and dynamic panel data models show that FI has a positive impact on EG in all the studied economies. Policy Considerations: A set of recommendations for policy designers and decision makers is provided to build the appropriate instruments and incentives to encourage the attraction of FI to boost EG and, therefore, to enhance social welfare.

Keywords: Economic growth; foreign investment; Granger causality; panel data. (search for similar items in EconPapers)
Date: 2019
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.lifescienceglobal.com/independent-jour ... data-model-1977-2017

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:lif:jrgelg:v:8:y:2019:p:838-846

Access Statistics for this article

Journal of Reviews on Global Economics is currently edited by Michael McAleer and Chia-Lin Chang

More articles in Journal of Reviews on Global Economics from Lifescience Global
Bibliographic data for series maintained by Faisal Ameer Khan ( this e-mail address is bad, please contact ).