Muhammad, Shahbaz and Nuno, Carlos Leitão and Summaira, Malik (2011): Foreign direct investment-economic growth nexus: The role of domestic financial development in Portugal.
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The aim of present paper is to examine the role of financial development on FDI-Growth nexus using annual data over the period of 1975-2008. The results show that financial development is playing its role well but not satisfactory. This study will provide new guidelines for policy making authorities for Portuguese's economy. The manuscript applies the unrestricted error correction model (ECM) estimator advanced by Inder (1993) while ARDL bounds testing approach is employed to find cointegration among variables. Stationarity issue is investigated by Ng-Perron unit root test. The results show that financial development stimulates economic growth for the case of Portugal. Foreign direct investment also good promoter of economic growth while investment in public capital stock is contributing more as compared to financial development and foreign direct investment. Inflation declines economic growth.
|Item Type:||MPRA Paper|
|Original Title:||Foreign direct investment-economic growth nexus: The role of domestic financial development in Portugal|
|English Title:||Foreign Direct Investment-Economic Growth Nexus: The Role of Domestic Financial Development in Portugal|
|Keywords:||Foreign Direct Investment, Growth, Cointegration, Portugal|
|Subjects:||B - History of Economic Thought, Methodology, and Heterodox Approaches > B2 - History of Economic Thought since 1925 > B22 - Macroeconomics|
|Depositing User:||Muhammad Shahbaz|
|Date Deposited:||20. Oct 2011 16:44|
|Last Modified:||14. Feb 2013 07:13|
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