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Foreign Direct Investment and Growth Relationship in Georgia

Author

Listed:
  • Faruk G rsoy

    (International Black Sea University, Tbilisi, Georgia.)

  • H seyin Kalyoncu

    (Melik ah University, Kayseri, Turkey.)

Abstract

This paper aims to investigate the empirically the impact of FDI on economic growth of Georgia over the period of 1997-2010. The Engle-Granger cointegration and Granger causality tests are used in order to analyse the causal relationship between FDI and economic growth. It is crucial to see the directions of causality between two variables for the policy makers to encourage private sectors. It is found that these two variables are cointegrated. Our empirical findings suggest that it is FDI that causes GDP in the case of Georgia.

Suggested Citation

  • Faruk G rsoy & H seyin Kalyoncu, 2012. "Foreign Direct Investment and Growth Relationship in Georgia," International Journal of Economics and Financial Issues, Econjournals, vol. 2(3), pages 267-271.
    • Handle: RePEc:eco:journ1:2012-03-4
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    References listed on IDEAS

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    More about this item

    Keywords

    Economic growth; Foreign direct investment; Granger causality;
    All these keywords.

    JEL classification:

    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity

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