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FDI And Economic Growth. Evidence From Simultaneous Equation Models

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  • Ruxanda, Gheorghe

    ()
    (The Academy of Economic Studies, Bucharest)

  • Muraru, Andreea

    ()
    (The Academy of Economic Studies, Bucharest)

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    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.

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    File URL: http://www.ipe.ro/rjef/rjef1_10/rjef1_10_3.pdf
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    Bibliographic Info

    Article provided by Institute for Economic Forecasting in its journal Romanian Journal for Economic Forecasting.

    Volume (Year): (2010)
    Issue (Month): 1 (March)
    Pages: 45-58

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    Handle: RePEc:rjr:romjef:v::y:2010:i:1:p:45-58

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    Related research

    Keywords: foreign direct investment; economic growth; simultaneous equation models;

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