IDEAS home Printed from https://ideas.repec.org/a/ags/ajaees/357443.html

Foreign Direct Investment and Gross Domestic Investment: Evidence from Asean 5

Author

Listed:
  • Ridzuan, Abdul Rahim
  • Abdul Majid, Mohd Azlan
  • Noor, Abdul Halim Mohd
  • Ahmed, Elsadig Musa

Abstract

This paper is aiming to evaluate the impact of foreign direct investment (FDI) and gross domestic investment (GDI) on the growth rate of real gross domestic per capita of the founding members of ASEAN group namely Malaysia, Singapore, Thailand, Indonesia and Philippines. By following the neo classical cum neo-liberal theories, and the dependency theory, this study maintains that the economic growth rates as one of the best proxy to measure economic development for developing countries. Time-series analyses utilizing the Autoregressive Distributive Lag (ARDL) technique were employed. The results of the ECM-ARDL for long run analysis showed that most of the coefficients in the long run derived from Malaysia, Thailand, Singapore and Philippines are significant. These results are consistent with the Dependency, Neo-classical and neo-liberal theory. Other country in this study shows a mix evidence of relationship between their independent variables and the dependent variables.

Suggested Citation

  • Ridzuan, Abdul Rahim & Abdul Majid, Mohd Azlan & Noor, Abdul Halim Mohd & Ahmed, Elsadig Musa, 2014. "Foreign Direct Investment and Gross Domestic Investment: Evidence from Asean 5," Asian Journal of Agricultural Extension, Economics & Sociology, Asian Journal of Agricultural Extension, Economics & Sociology, vol. 3(6).
    • Handle: RePEc:ags:ajaees:357443
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/357443/files/Ridzuan362014AJAEES10430.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. repec:aer:wpaper:165 is not listed on IDEAS
    2. James Laurenceson & Joseph C.H. Chai, 2003. "Financial Reform and Economic Development in China," Books, Edward Elgar Publishing, number 2714.
    3. Blomstrom, Magnus & Persson, Hakan, 1983. "Foreign investment and spillover efficiency in an underdeveloped economy: Evidence from the Mexican manufacturing industry," World Development, Elsevier, vol. 11(6), pages 493-501, June.
    4. Magnus Blomström & Robert E. Lipsey & Mario Zejan, 1996. "Is Fixed Investment the Key to Economic Growth?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 111(1), pages 269-276.
    5. de Mello, Luiz R, Jr, 1999. "Foreign Direct Investment-Led Growth: Evidence from Time Series and Panel Data," Oxford Economic Papers, Oxford University Press, vol. 51(1), pages 133-151, January.
    6. Bende-Nabende, A. & Ford, J. L., 1998. "FDI, Policy Adjustment and Endogenous Growth: Multiplier Effects from a Small Dynamic Model for Taiwan, 1959-1995," World Development, Elsevier, vol. 26(7), pages 1315-1330, July.
    7. repec:aer:wpaper:4ba793af061d is not listed on IDEAS
    8. Ayanwale, Adeolu B, 2007. "FDI and Economic Growth: Evidence from Nigeria," Working Papers e87aeba5-d7ac-4751-bddf-4, African Economic Research Consortium.
    9. repec:bla:econom:v:41:y:1974:i:162:p:176-93 is not listed on IDEAS
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. B. Seetanah, 2009. "Is Foreign Direct Investment Growth Conducive? New Evidences From Sub-Saharan African Countries, 1980-2005," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 9(2).
    2. Mamingi, Nlandu & Martin, Kareem, 2018. "Foreign direct investment and growth in developing countries: evidence from the countries of the Organisation of Eastern Caribbean States," Revista CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), April.
    3. Fambon, Samuel, 2013. "Foreign Capital Inflow and Economic Growth in Cameroon," WIDER Working Paper Series 124, World Institute for Development Economic Research (UNU-WIDER).
    4. Cruz Mejía, Jose Vidal & Cruz-Rodríguez, Alexis, 2020. "Impacto de la inversión extranjera directa en el crecimiento económico, las exportaciones y el empleo de República Dominicana [Impact of foreign direct investment on economic growth, exports and employment in the Dominican Republic]," MPRA Paper 100990, University Library of Munich, Germany.
    5. Frank Adusah-Poku & William Bekoe, 2018. "Does the Form Matter? Foreign Capital Inflows and Economic Growth," Journal of Economics and Econometrics, Economics and Econometrics Society, vol. 61(3), pages 39-74.
    6. Ntanga Ntita, Jean de Dieu & Kazadi Ntita, François & Ntita Ntita, Jean, 2019. "Investissements Directs Étrangers Et Croissance Économique En République Démocratique Du Congo (Rdc) [Foreign Direct Investment And Economic Growth In Democratic Republic Of Congo (Drc)]," MPRA Paper 92910, University Library of Munich, Germany.
    7. Argentino Pessoa, 2008. "Multinational Corporations, Foreign Investment, and Royalties and License Fees: Effects on Host-Country Total Factor Productivity," Notas Económicas, Faculty of Economics, University of Coimbra, issue 28, pages 6-31, December.
    8. Akinlo Taiwo & Simon-Oke O. Olayemi, 2015. "Re-examine foreign direct investment and economic growth: Panel co-integration and causality tests for sub-Saharan African countries," International Area Studies Review, Center for International Area Studies, Hankuk University of Foreign Studies, vol. 18(1), pages 73-86, March.
    9. Melisa Chanegriha & Chris Stewart & Christopher Tsoukis, 2020. "Testing for causality between FDI and economic growth using heterogeneous panel data," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 29(5), pages 546-565, July.
    10. Champa Bati Dutta & Mohammed Ziaul Haider & Debasish Kumar Das, 2017. "Dynamics of Economic Growth, Investment and Trade Openness: Evidence from Bangladesh," South Asian Journal of Macroeconomics and Public Finance, , vol. 6(1), pages 82-104, June.
    11. Rashid Sbia & Sahel Alrousan, 2016. "Does Financial Development Induce Economic Growth in UAE? The Role of Capitalization and Foreign Direct Investment," International Journal of Economics and Financial Issues, Econjournals, vol. 6(2), pages 703-710.
    12. Antoci, Angelo & Borghesi, Simone & Russu, Paolo & Ticci, Elisa, 2015. "Foreign direct investments, environmental externalities and capital segmentation in a rural economy," Ecological Economics, Elsevier, vol. 116(C), pages 341-353.
    13. Ummya Salma & Md. Fazlul Huq Khan & Md. Masum Billah, 2023. "Foreign Capital and Economic Growth: Evidence from Bangladesh," Papers 2312.04695, arXiv.org.
    14. George Galanos & Thomas Poufinas, 2018. "Impact of FDI in the Fiscal Adjustment Process," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 24(3), pages 265-277, August.
    15. Liu, Xiaming & Parker, David & Vaidya, Kirit & Wei, Yingqi, 2001. "The impact of foreign direct investment on labour productivity in the Chinese electronics industry," International Business Review, Elsevier, vol. 10(4), pages 421-439, August.
    16. Lenuta CARP, 2012. "Analysis Of The Relationship Between Foreign Direct Investments And Economic Growth – Case Of Romania," Review of Economic and Business Studies, Alexandru Ioan Cuza University, Faculty of Economics and Business Administration, issue 9, pages 175-188, June.
    17. Monnet Benoît Patrick Gbakou & Mustapha Sadni Jallab & René Sandretto, 2008. "Foreign Direct Investment, Macroeconomic Instability And Economic Growth in MENA Countries," Post-Print halshs-00303694, HAL.
    18. Narula, Rajneesh & Portelli, Brian, 2004. "Foreign direct investment and economic development: Opportunities and limitations from a developing country perspective," Research Memorandum 009, Maastricht University, Maastricht Economic Research Institute on Innovation and Technology (MERIT).
    19. Cai, Zongwu & Chen, Linna & Fang, Ying, 2018. "A semiparametric quantile panel data model with an application to estimating the growth effect of FDI," Journal of Econometrics, Elsevier, vol. 206(2), pages 531-553.
    20. Sushanta Mallick & Tomoe Moore, 2008. "Foreign Capital in a Growth Model," Review of Development Economics, Wiley Blackwell, vol. 12(1), pages 143-159, February.

    More about this item

    Keywords

    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:ajaees:357443. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://journalajaees.com/index.php/AJAEES/index .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.