Causality analysis between FDI and economic growth: application in selected countries of MENA region

Ali Bouchrika and Wajdi Bardi ()
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Ali Bouchrika: University of Gabes
Wajdi Bardi: University of Gabes

SN Business & Economics, 2025, vol. 5, issue 2, 1-12

Abstract: Abstract This article focuses on the causality technique in a panel data model. The approach of Dumitrescu and Hurlin Testing for Granger non-causality in heterogeneous panels was used to test the (not) causality in the sense of Granger Testing for causality a personal view point between investment and economic growth in MENA countries, during the period from 1980 to 2021. Our empirical results show that foreign direct investment (FDI) has a significant effect on economic growth for a particular number of countries. Indeed, a test of non-causality in the Granger sense of FDI towards gross domestic product leads to rejection of the null hypothesis for eight countries of the study. On the other hand, economic growth can cause FDI only for two countries.

Keywords: Granger causality; GDP growth; Foreign direct investment; MENA countries (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1007/s43546-024-00782-8

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