Does FDI Stimulate GDP Growth? Evidence from the Middle Eastern and BRICS Countries

Ahmad S. Al Humssi, Maria V. Petrovskaya, Larisa N. Sorokina and Vladimir Z. Chaplyuk

Chapter 17 in The Sustainable Development of the Entrepreneurial Economy in the Fifth Industrial Revolution, 2026, pp 195-205 from World Scientific Publishing Co. Pte. Ltd.

Abstract: This research aims to evaluate the impact of inward FDI on GDP in the Middle Eastern (ME) and BRICS countries. The research focuses on 19 countries across 4 continents: Asia, Europe, Africa, and South America. To detect the existence of the causal relationship between the inward FDI and GDP, the authors relied on contemporary standard tools, such as the Engle–Granger test, Johansen cointegration methodology, Heteroskedasticity test (Harvey), and others. The research finds no dynamic causal relationship between inward FDI and GDP in the short or long term. In other words, inward FDI in ME and BRICS countries does not contribute to GDP growth, except in Brazil and India. This research does establish a short-term, unidirectional causal relationship where FDI influences GDP. Specifically, it shows a positive causal relationship for Brazil and a negative one for India.

Keywords: Sustainable Development; Entrepreneurship; Innovation; Technology; Information Management; Organizational Behavior; Industrial Organization; Entrepreneurial Economy; Fifth Industrial Revolution; Cause-and-Effect Relationships; Fourth Industrial Revolution; Digital Technology; Industry 5.0; Operations Management; Operations Research; Supply Chain Management; Fintech; Cryptocurrency; Blockchain; Economics and Finance; Corporate Governance; Technological Environment; National Economy; State Management; Corporate Management; Agro-Industrial Complex 5.0; Fuel and Energy Complex 5.0; BRICS; EAEU; Central Asia; Social Responsibility; Digital Competitiveness; Digital Energy; Entrepreneurial Universities 5.0; Machine Learning; Cyber-Social System; Smart Company; Management of AI; Automatization; Decision-Making in Entrepreneurship; Big Data; Blockchain Finance; Robotisation Of Production; Applied Technological Solutions; Smart City; Local Entrepreneurial Economy; Modernisation; Institutes of Globalisation; E-Government; Innovative Economy; Knowledge Society; BRICS+ (search for similar items in EconPapers)
JEL-codes: L26 O33 Q01 (search for similar items in EconPapers)
Date: 2026
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