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FDI And Economic Growth. Evidence From Simultaneous Equation Models

Author

Listed:
  • Ruxanda, Gheorghe

    (The Academy of Economic Studies, Bucharest)

  • Muraru, Andreea

    (The Academy of Economic Studies, Bucharest)

Abstract

This paper analyses whether foreign direct investments have an impact on the Romanian economic growth. By means of simultaneous equation methods we obtained evidence of the bi-directional connection between the two, meaning that incoming FDI stimulates economic growth and, in its turn, a higher GDP attracts FDI. Two methods were used in performing the analysis, one considering the relation between the share of FDI in GDP and economic growth in a five-equation system and the second considering the levels of FDI and GDP, respectively, in a two-equation system.

Suggested Citation

  • Ruxanda, Gheorghe & Muraru, Andreea, 2010. "FDI And Economic Growth. Evidence From Simultaneous Equation Models," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(1), pages 45-58, March.
    • Handle: RePEc:rjr:romjef:v::y:2010:i:1:p:45-58
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    Citations

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    Cited by:

    1. Rendón Obando, Hernando & Ramírez Franco, Luz Dary, 2017. "Impacto de la inversión extranjera directa y del grado de apertura de la economía sobre el crecimiento económico para América Latina 1980-2010/Impact of Foreign Direct Investment and Openness Degree o," Estudios de Economia Aplicada, Estudios de Economia Aplicada, vol. 35, pages 217-244, Enero.
    2. Savoiu, Gheorghe & Dinu, Vasile & Ciuca, Suzana, 2013. "Foreign Direct Investment based on Country Risk and other Macroconomic Factors. Econometric Models for Romanian Economy," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(1), pages 39-61, March.
    3. Miguel Cruz Vásquez & Alfonso Mendoza Velázquez & Beatriz Pico González, 2019. "Foreign direct investment, economic opening and economic growth in Lat," Contaduría y Administración, Accounting and Management, vol. 64(1), pages 15-16, Enero-Mar.
    4. Sam Hobbs & Dimitrios Paparas & Mostafa E. AboElsoud, 2021. "Does Foreign Direct Investment and Trade Promote Economic Growth? Evidence from Albania," Economies, MDPI, vol. 9(1), pages 1-19, January.
    5. Osamo Caleb KEHINDE & Awogbemi, Clement ADEYEYE & Anthony Ayo ANDREW, 2013. "A Cost-Benefit Analysis of Foreign Direct Investment Inflows into Nigeria," Asian Journal of Empirical Research, Asian Economic and Social Society, vol. 3(7), pages 808-820, July.
    6. Miguel Cruz Vásquez & Alfonso Mendoza Velázquez & Beatriz Pico González, 2019. "Inversión extranjera directa, apertura económica y crecimiento económico en América Latina," Contaduría y Administración, Accounting and Management, vol. 64(1), pages 13-14, Enero-Mar.
    7. Taghizadeh-Hesary, Farhad & Rasoulinezhad, Ehsan & Yoshino, Naoyuki, 2017. "Trade Linkages and Transmission of Oil Price Fluctuations in a Model Incorporating Monetary Variables," ADBI Working Papers 777, Asian Development Bank Institute.
    8. Andrei, Dalina Maria, 2012. "Foreign Direct Investments in Romania. A Structural and Dynamic View," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(4), pages 129-146, December.
    9. Liliana SCUTARU, 2014. "Foreign Direct Investment In Romania – Structural And Sectorial Dynamics," SEA - Practical Application of Science, Romanian Foundation for Business Intelligence, Editorial Department, issue 5, pages 563-568, November.
    10. Mai, Nhat Chi, 2018. "Three Essays On Financial Integration And Trade Liberalization," OSF Preprints hfrdq, Center for Open Science.
    11. Calcedonia Enache & Fernando Merino, 2017. "Determinants of Foreign Direct Investment in Romania: a Quantitative Approach," The AMFITEATRU ECONOMIC journal, Academy of Economic Studies - Bucharest, Romania, vol. 19(44), pages 275-275, February.
    12. Taghizadeh-Hesary, Farhad & Yoshino, Naoyuki & Rasoulinezhad, Ehsan & Chang, Youngho, 2019. "Trade linkages and transmission of oil price fluctuations," Energy Policy, Elsevier, vol. 133(C).
    13. Justin Paul & Gurmeet Singh, 2017. "The 45 years of foreign direct investment research: Approaches, advances and analytical areas," The World Economy, Wiley Blackwell, vol. 40(11), pages 2512-2527, November.
    14. Paul, Justin & Feliciano-Cestero, María M., 2021. "Five decades of research on foreign direct investment by MNEs: An overview and research agenda," Journal of Business Research, Elsevier, vol. 124(C), pages 800-812.
    15. Azka Amin & Sofia Anwar & Xi‐Hua Liu, 2022. "Outward foreign direct investment and economic growth in Romania: Evidence from non‐linear ARDL approach," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 27(1), pages 665-677, January.

    More about this item

    Keywords

    foreign direct investment; economic growth; simultaneous equation models;
    All these keywords.

    JEL classification:

    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies

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