IDEAS home Printed from
MyIDEAS: Log in (now much improved!) to save this article

The Relationship between Gross Domestic Product and Foreign Direct Investment: The Case of Cambodia

Listed author(s):
  • Lim GuechHeang


    (Pannasastra University of Cambodia, Phnom Penh, Cambodia.)

  • Pahlaj Moolio


    (Pannasastra University of Cambodia, Phnom Penh, Cambodia.)

Foreign Direct Investment (FDI) is widely believed to have positive effects on economic growth; yet for Cambodia, over 19 years (1993-2011) of attracting FDI inflows, the growth rate of Gross Domestic Product (GDP) has averaged at 7%, which demand a modest attempt to study their relationship whether FDI drives growth of Cambodia’s economic output. This paper aims to examine the relationship between foreign direct investment and gross domestic product of Cambodia in long run over the period of 1993-2011 by using simple regression analysis, Augmented Dickey-Fuller test, Durbin-Watson test, Breusch-Godfrey Serial Correlation LM test, Breusch-Pagan-Godfrey test, and Jarque-Bera test. The result from regression found that there is a positive relationship between FDI and GDP in the long run in Cambodia, which is also supported by qualitative studies that is based on the collection of existing studies from recognized domestic and international institutions, people in senior positions, and researchers. All of the qualitative studies presented in this paper claim that FDI positively affects GDP, and most significantly, to the employment opportunities generated for local people, which in the long run help unemployment and poverty reduction in Cambodia. However, GDP growth rate has averaged at 7% over 19 years although the influx of FDI inflows dramatic increase probably because of the internal factors of Cambodia, particularly the limited absorptive capability of the advanced technology.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL:
Download Restriction: no

Article provided by Khadim Ali Shah Bukhari Institute of Technology (KASBIT) in its journal KASBIT Bussiness Journal.

Volume (Year): 6 (2013)
Issue (Month): (December)
Pages: 87-99

in new window

Handle: RePEc:ksb:journl:v:6:y:2013:p:87-99
Contact details of provider: Web page:

More information through EDIRC

No references listed on IDEAS
You can help add them by filling out this form.

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:ksb:journl:v:6:y:2013:p:87-99. 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: (Yasir Jaseem)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.