The impact of foreign direct investment on economic growth

Avazov, Nuriddin; Baxodirovna, Begalova Durdona

doi:10.5958/2249-7137.2021.00325.6

Cited by 5 publications

(4 citation statements)

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“…Despite a large body of literature, the link between FDI, government spending, and economic growth has received little attention. The authors Rustamugli and Baxodirovna (2021), who looked at one of the most powerful economies in the world, Singapore supported Bougharriou, Benayed, and Gabsi (2019) important contribution by demonstrating that there is a positive correlation between FDI, government spending, and economic growth.…”

Section: Development Of Hypothesesmentioning

confidence: 94%

Public spending and economic growth: Evidence from the Western Balkans

Mustafa,

Abdullahu

2024

IJAEFA

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The objective of this study is to examine the relationship between public expenditures, foreign investments, and the growth of the Gross Domestic Product (GDP) for the years 2002-2021 in the countries of the Western Balkans (BB6) and Croatia. The analysis includes data on $2.8 trillion of GDP, $668 billion of public expenditures, and $160 billion of FDI for these states. The methodology used in this study is based on a detailed examination of public expenditures and their impact on the Gross Domestic Product. This article investigates two hypotheses, thoroughly assessing their impact on GDP growth. Through the use of the Ordinary Least Squares (OLS) econometric model, concrete results with over 95% reliability have been obtained. The variables are determined based on multiple regressions for the findings we will obtain based on econometric calculations using the fixed effects, standard deviation, mean, and linear regression models. The findings of this study relate directly to the stated aims and objectives of the publication. The results presented in the study are an essential component of the study's conclusions. We found that some independent factors have a uniform impact on GDP growth, while others have a significant impact on real growth. Also, our findings confirm economic theories that argue that an increase in government spending leads to an increase in GDP. The data show that public investment in the Western Balkans has historically been overlooked, a gap in the literature that our research attempts to fill.

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Section: Development Of Hypothesesmentioning

confidence: 94%

Public spending and economic growth: Evidence from the Western Balkans

Mustafa,

Abdullahu

2024

IJAEFA

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“…These standard approaches, however, have been criticized for being highly unreliable in small samples, inconsistent with different order integrated variables, resulting in significantly misleading results, and biased against rejecting the null hypothesis (no-co-integration), necessitating an adjustment for critical values [26][27][28]. As a consequence, autoregressive distributed lag (ARDL) bounds testing was utilized to increase test power [29][30][31][32][33].…”

Section: Methodsmentioning

confidence: 99%

On the Determinants of Unemployment in Somalia: What is the Role of External Debt?

Warsame,

Mohamed

2024

IJSDP

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The linkage between unemployment, inflation, GDP, and external debt spans several economic themes. Because unemployment remains a concern in the global economy, researchers and economists are focused on it. Other things being equal, it is widely acknowledged that achieving price stability will have a favorable impact on employment and economic growth, especially if the optimal threshold can be met. Meanwhile, the right balance remains elusive, as central banks around the world compete to increase employment while maintaining price stability. In this study, we analyze annualized data from 1991 to 2019 to try to understand how unemployment in Somalia responds to changes in the price level. To process the data collection, the ARDL model and the Bound test analytical tools were used. The parameter estimate implies that when the external debt changes by 1%, the jobless rate increases by 0.031%, according to the findings. GDP, on the other hand, had a negative but small impact on the unemployment rate, and was associated with a 0.59% decrease in the unemployment rate. We believe that, rather than depending simply on monetary targeting to balance unemployment, GDP, GDP deflator, and foreign debt, economic deepening can play a supporting role in sustaining an optimal inflation rate and a minimal unemployment level.

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“…In a study by Rustamugli and Baxodirovna [49], it was shown that an increase in investment in financially developed countries can lead to higher growth rates than in financially poor countries. Local conditions, such as the development of a country's financial markets and the level of education, affect the impact of FDI on economic growth.…”

Section: Literature Reviewmentioning

confidence: 99%

Impact of Foreign Direct Investment on Economic Growth — Case Study of the SEE Countries

Shkodra,

Ahmeti,

Krasniqi

2024

IJSDP

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The main focus of this study is on foreign direct investment (FDI), which (through its direct and indirect contributions) can serve as the main driver of economic development for countries in general. The study examines countries in Southeastern Europe (SEE) -Kosovo, Albania, Montenegro, Serbia, Northern Macedonia and Bosnia and Herzegovina for the period 2005-2020 for the dependent variable, i.e., GDP, and for the independent variables: Goods and Services, Wages, Social Transfers, Subsidies, Investment Expenditures, and FDI. The techniques used to analyse the data include the descriptive method, the regression model, the DW test and (for multicollinearity between variables) the VIF test. In general, the study finds a positive and significant relationship between economic growth and FDI flows in some countries, but not in Kosovo and Bosnia and Herzegovina. Based on the results studied, more appropriate FDI policies are suggested. It is suggested that policy makers in these countries not only respond to protect the deterioration of GDP, but also support the infrastructure for doing business.

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The impact of foreign direct investment on economic growth

Cited by 5 publications

References 0 publications

Public spending and economic growth: Evidence from the Western Balkans

Public spending and economic growth: Evidence from the Western Balkans

On the Determinants of Unemployment in Somalia: What is the Role of External Debt?

Impact of Foreign Direct Investment on Economic Growth — Case Study of the SEE Countries

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