Munich Personal RePEc Archive

Foreign direct investment and economic growth nexus in Zimbabwe: A cointegration approach

Munyanyi, Musharavati Ephraim (2017): Foreign direct investment and economic growth nexus in Zimbabwe: A cointegration approach.

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Abstract

This paper seeks to examine the relationship between foreign direct investment and economic growth in Zimbabwe by applying an Autoregressive Distributed Lag (ARDL) cointegration approach on time series data stretching from 1975 to 2007. The short-and long-run relationship results show that foreign direct investment has a positive effect on economic growth and this confirms the proposition of economic theory and the result findings of the previous studies in this area. According to the study, the results imply that economic and investment policies which can attract more foreign investments be effectively drafted so as to stimulate economic growth. This also involves creating a stable economic and investment environment, improving infrastructure, and ensuring clarity and consistency of investment policies.

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