Causal Nexus Among Exports, Foreign Direct Investment and Economic Growth Revisited: New Evidence From Sub-Saharan Africa

Doğruel, A. Suut; Doğruel, Fatma

doi:10.24954/jore.2018.24

Cited by 2 publications

(4 citation statements)

References 13 publications

(10 reference statements)

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“…It is crucial to determine the optimal lag structure prior to estimation. 23 Following Tekin (2018), in each of the two systems of equations, we allow one lag for both the dependent and independent variables, without allowing them to vary across countries. We then estimate the two systems of Seemingly Unrelated Regressions adopting the Bayesian testing methodology explained in section 2 above.…”

Section: Data and Estimation Resultsmentioning

confidence: 99%

Section: Bayesian Analysis Of Seemingly Unrelated Regression Systemsmentioning

confidence: 99%

“…Kónya's procedure for testing Granger causality which is based on estimation of SUR systems and Wald tests with country specific bootstrap critical values has become quite popular in applied research in economics (see Kar et al 2011, Tekin 2012a). Tekin (2018) proposed another alternative Granger causality testing procedure, again based on estimation of SUR systems, and which can properly deal with cross-sectional dependence and heterogeneity issues. Rather than using the SUR estimator and Wald tests with bootstrap critical values, this alternative approach employs Bayesian estimation for testing Granger causality.…”

Section: Bayesian Analysmentioning

confidence: 99%

“…This article examines causality relations among economic growth, development assistance and openness to trade in low income countries. We employ a recent Granger-causality testing methodology developed in Tekin (2018) which is based on Bayesian estimation of SUR systems, the Markov Chain Monte Carlo (MCMC) method, and Gibbs sampling procedure.…”

Section: Introductionmentioning

confidence: 99%

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A Note on Causality Relations Among Economic Growth, Development Assistance and Trade Openness in Low Income Countries

Tekin¹

2020

M U Iktisadi Ve Idari Bilimler Dergisi

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This article tests for causality relations among economic growth, official development assistance and openness-to-trade in low income countries. A recently developed Granger causality testing methodology based on Bayesian estimation of Seemingly Unrelated Regression (SUR) systems is employed in this study. Findings suggest a direct, unidirectional causality from official development assistance to economic growth in Chad, Madagascar, Democratic Republic of the Congo, the Gambia and Sierra Leone. In Chad and the Gambia, regression coefficients are found to be negative, suggesting a negative impact of foreign aid on economic growth. We therefore fail to provide clear-cut empirical evidence in support of aid effectiveness. Test results suggest unidirectional causality from opennessto-trade to economic growth in Chad, Democratic Republic of the Congo, the Gambia, Rwanda, Mali, Niger and Togo. In all these countries, except Democratic Republic of the Congo, the mean estimation beta is positive, providing some support for the trade-led growth hypothesis. For Chad, Rwanda, Malawi and Madagascar we find evidence for positive, unidirectional causality in reverse direction, that is, from economic growth to openness-to-trade. Finally, in Benin, Burkina Faso and Mali we find evidence that foreign aid inflows Granger-cause and enhance openness-to-trade.

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Section: Data and Estimation Resultsmentioning

confidence: 99%

Section: Bayesian Analysis Of Seemingly Unrelated Regression Systemsmentioning

confidence: 99%

Section: Bayesian Analysmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

See 2 more Smart Citations

A Note on Causality Relations Among Economic Growth, Development Assistance and Trade Openness in Low Income Countries

Tekin¹

2020

M U Iktisadi Ve Idari Bilimler Dergisi

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From short to long term: Dynamic analysis of FDI and net export in global regions

Lakshani,

Sandaruwan,

Fernando

et al. 2023

PLoS ONE

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It is crucial to examine the impact between foreign direct investment (FDI) and net exports (NE) for unveiling international trade dynamics, and the economic development of different geographical regions. It yields sharp insights into how FDI inflows, driven by theories such as backward linkage, export platform, and knowledge transfer, enhance a host country’s export capacity and contribute to economic growth. Moreover, studying the reciprocal linkages between FDI and NE helps recognise the aspects of domestic factors, such as productivity and the product life cycle, in attracting FDI and increasing export performance. Based on those theories, the study aims to ascertain the dynamic causality or correlation between FDI and NE across all regions with the utilisation of panel data gathered from 110 countries, considering the period from 2002 to 2020. The Wavelet coherence method is used to investigate the relationship between these variables across different frequencies and periods, followed by a Granger causality test. The findings demonstrated that FDI and NE have a significant relationship in most regions, with a bidirectional relationship between FDI and NE across all continents. The results could assist respective governments and policymakers in formulating policies related to FDI flows and offer insights into how a host country can attract more FDI and boost NE.

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Causal Nexus Among Exports, Foreign Direct Investment and Economic Growth Revisited: New Evidence From Sub-Saharan Africa

Cited by 2 publications

References 13 publications

A Note on Causality Relations Among Economic Growth, Development Assistance and Trade Openness in Low Income Countries

A Note on Causality Relations Among Economic Growth, Development Assistance and Trade Openness in Low Income Countries

From short to long term: Dynamic analysis of FDI and net export in global regions

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