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The Nexus of Outward Foreign Direct Investment and Income: Evidence from Singapore

  • Chew Ging LEE

This paper examines the relationship between economic growth and outward foreign direct investment (FDI) in Singapore with cointegration and Granger causality analyses. Although we find gross domestic product (GDP) per capita and outward FDI are cointegrated, there is no evidence of long run causality between these two variables because the coefficient of error correction term is either statistically insignificant or with wrong sign. With the standard Granger causality test, the results indicate that increased outward FDI leads to higher GDP per capita, but higher GDP per capita actually leads to a decline in outward FDI.

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Article provided by Euro-American Association of Economic Development in its journal Applied Econometrics and International Development.

Volume (Year): 10 (2010)
Issue (Month): 1 ()
Pages:

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Handle: RePEc:eaa:aeinde:v:10:y:2010:i:1_13
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  1. Ellingsen, Gaute & Likumahuwa, Winfried & Nunnenkamp, Peter, 2006. "Outward FDI by Singapore : a different animal?," Open Access Publications from Kiel Institute for the World Economy 3947, Kiel Institute for the World Economy (IfW).
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