Foreign Direct Investment and Growth: An Empiricial Investigation Based on Cross-Country Comparison

Ozturk, Ilhan and Kalyoncu, Huseyin (2007): Foreign Direct Investment and Growth: An Empiricial Investigation Based on Cross-Country Comparison. Published in: Economia Internazionale , Vol. 60, No. 1, February : pp. 75-82.

Abstract

This paper investigates empirically the impact of FDI on economic growth of Turkey and Pakistan over the period of 1975-2004. To analyse the causal relationship between FDI and economic growth, the Engle-Granger cointegration and Granger causality tests are used. It is found that these two variables are cointegrated for both countries studied. Our empirical findings suggest that it is GDP that causes FDI in the case of Pakistan, while there is strong evidence of a bi-directional causality between the two variables for Turkey.

• Item Type: MPRA Paper
• Language: English
• Keywords: Economic growth, foreign direct investment, Granger causality
• Subjects: F - International Economics > F2 - International Factor Movements and International Business; C - Mathematical and Quantitative Methods > C2 - Single Equation Models ; Single Variables > C22 - Time-Series Models ; Dynamic Quantile Regressions ; Dynamic Treatment Effect Models ; Diffusion Processes; O - Economic Development, Innovation, Technological Change, and Growth > O4 - Economic Growth and Aggregate Productivity

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