The Causality of Foreign Direct Investment and Its Effects on Economic Growth: Re-estimated by a Directed Graph Approach

Yarui Li, Joshua D. Woodard and David Leatham

No 98791, 2011 Annual Meeting, February 5-8, 2011, Corpus Christi, Texas from Southern Agricultural Economics Association

Abstract: This paper uses the directed acyclic graph approach to analyze the causal patterns among foreign direct investment and other economic, social, and political variables, including GDP per capita as a proxy for economic growth. We find that economic growth causes FDI inflows for developing countries, while FDI induces economic growth for developed countries. Also, stock market is found to be an intermediary that amplifies the influence on FDI from many causal variables of FDI.

Keywords: Financial; Economics (search for similar items in EconPapers)
Pages: 44
Date: 2011
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Persistent link: https://EconPapers.repec.org/RePEc:ags:saea11:98791

DOI: 10.22004/ag.econ.98791

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