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Foreign direct investment led economic growth: an analysis of BRICS economies using panel data

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  • Divya Budhia
  • Tushinder Preet Kaur

Abstract

BRICS are the fast-growing emerging economies and have become most favoured destination for the foreign investors. Present paper endeavours to study the effect of capital formation, employment and foreign direct investment inflows on GDP in BRICS countries with panel data for the time period 2001-2017. Gross domestic product was taken as explained variable, and GFCF (Gross Fixed Capital Formation), employment and foreign direct investment inflows were taken as explanatory variables. Two different models, i.e. FEM and REM, were used for the analysis. Hausman test revealed that FEM model was applicable to the data. We found that all the three explanatory variables enhanced GDP. The results are in agreement with previous literature and strengthen the argument of giving a fillip to capital, labour and FDI to boost economic growth in BRICS countries.

Suggested Citation

  • Divya Budhia & Tushinder Preet Kaur, 2023. "Foreign direct investment led economic growth: an analysis of BRICS economies using panel data," World Review of Entrepreneurship, Management and Sustainable Development, Inderscience Enterprises Ltd, vol. 19(3/4/5), pages 379-388.
    • Handle: RePEc:ids:wremsd:v:19:y:2023:i:3/4/5:p:379-388
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    Keywords

    BRICS; FDI; GDP; panel regression.;
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