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The impact of foreign direct investment on economic growth: Evidence from MERCOSUR countries

Author

Listed:
  • André Abdala

    (Federal University of Espírito Santo, Av. Fernando Ferrari, 514, Goiabeiras, Vitória -ES -CEP 29075-910, Brazil)

  • Silvia Borges Dondi Guido

    (Federal University of Espírito Santo, Av. Fernando Ferrari, 514, Goiabeiras, Vitória -ES -CEP 29075-910, Brazil)

Abstract

This study is a literary analysis with the purpose of verifying the dynamic relation of the São Paulo stock exchange index with some macroeconomic variables, between January 2014 and August 2017, when Brazil was going through a serious political crisis, in which the economic activity was affected and therefore the stock market. Thus, these relationships are evaluated by the Johansen Cointegration Test to precisely verify the long-term relationship between the Brazilian stock market and the other variables. And the results indicate a negative weight of inflation expectations, interest rates and public debt, while the exchange rate and economic activity positively affect the stock market index.

Suggested Citation

  • André Abdala & Silvia Borges Dondi Guido, 2018. "The impact of foreign direct investment on economic growth: Evidence from MERCOSUR countries," Journal of Economics and Political Economy, EconSciences Journals, vol. 5(3), pages 399-409, September.
    • Handle: RePEc:cvv:journ1:v:5:y:2018:i:3:p:399-409
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    References listed on IDEAS

    as
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    4. Johansen, Soren, 1988. "Statistical analysis of cointegration vectors," Journal of Economic Dynamics and Control, Elsevier, vol. 12(2-3), pages 231-254.
    5. Thomas J. Sargent & Neil Wallace, 1984. "Some Unpleasant Monetarist Arithmetic," Palgrave Macmillan Books, in: Brian Griffiths & Geoffrey E. Wood (ed.), Monetarism in the United Kingdom, pages 15-41, Palgrave Macmillan.
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    Keywords

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    JEL classification:

    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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