The dynamic interactions among foreign direct investment, economic growth, exports and unemployment: evidence from Taiwan
The vector autoregression (VAR) method of variance decomposition and impulse response function analysis was applied to analyze dynamic relationships among foreign direct investment (FDI), economic growth, unemployment, and trade in Taiwan. The analysis results show that both economic growth and exports have positive impacts on FDI inflow; however, export expansion has a negative impact on FDI outflow. FDI inflow also has an obvious positive impact on exports and economic performance. The evidence also shows that there is no relationship between FDI inflow and unemployment. In addition, we found that a positive relationship exists between economic growth and exports while a negative relationship exists between unemployment and economic growth. Copyright Springer Science+Business Media, LLC 2005
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Geweke, John & Meese, Richard & Dent, Warren, 1983. "Comparing alternative tests of causality in temporal systems : Analytic results and experimental evidence," Journal of Econometrics, Elsevier, vol. 21(2), pages 161-194, February.
- Sims, Christopher A, 1980. "Macroeconomics and Reality," Econometrica, Econometric Society, vol. 48(1), pages 1-48, January.
- Sims, Christopher A & Stock, James H & Watson, Mark W, 1990. "Inference in Linear Time Series Models with Some Unit Roots," Econometrica, Econometric Society, vol. 58(1), pages 113-44, January.
- Park, Joon Y. & Phillips, Peter C.B., 1989.
"Statistical Inference in Regressions with Integrated Processes: Part 2,"
Cambridge University Press, vol. 5(01), pages 95-131, April.
- Peter C.B. Phillips & Joon Y. Park, 1986. "Statistical Inference in Regressions with Integrated Processes: Part 2," Cowles Foundation Discussion Papers 819R, Cowles Foundation for Research in Economics, Yale University, revised Feb 1987.
- Zhang, Kevin Honglin & Song, Shunfeng, 2001. "Promoting exports: the role of inward FDI in China," China Economic Review, Elsevier, vol. 11(4), pages 385-396.
- Xiaohui Liu & Peter Burridge & P. J. N. Sinclair, 2002. "Relationships between economic growth, foreign direct investment and trade: evidence from China," Applied Economics, Taylor & Francis Journals, vol. 34(11), pages 1433-1440.
- Haishun Sun & Ashok Parikh, 2001. "Exports, Inward Foreign Direct Investment (FDI) and Regional Economic Growth in China," Regional Studies, Taylor & Francis Journals, vol. 35(3), pages 187-196.
- Daniel Pick & Utpal Vasavada, 1998. "Exchange Rate Effects on the Relationship between FDI and Trade in the U.S. Food Processing Industry," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 80(5), pages 1073-1079.
- Marchant, Mary A. & Cornell, Dyana N. & Koo, Won W., 2002. "International Trade And Foreign Direct Investment: Substitutes Or Complements?," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 34(02), August.
- Xiaming Liu & Haiyan Song & Peter Romilly, 1997. "An empirical investigation of the causal relationship between openness and economic growth in China," Applied Economics, Taylor & Francis Journals, vol. 29(12), pages 1679-1686.
- van Schaik, A.B.T.M. & de Groot, H.L.F., 1995.
"Unemployment and endogenous growth,"
1995-75, Tilburg University, Center for Economic Research.
- Yingqi Wei & Xiaming Liu & Haiyan Song & Peter Romilly, 2001. "Endogenous innovation growth theory and regional income convergence in China," Journal of International Development, John Wiley & Sons, Ltd., vol. 13(2), pages 153-168.
When requesting a correction, please mention this item's handle: RePEc:kap:ecopln:v:38:y:2005:i:3:p:235-256. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Sonal Shukla)or (Christopher F. Baum)
If references are entirely missing, you can add them using this form.