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Foreign Direct Investment, Export and Economic Growth: Empirical Evidence from New EU Countries

Author

Listed:
  • Acaravci, Ali

    () (Mustafa Kemal University, Faculty of Economics and Administrative Sciences, Antakya-Hatay, Turkey, Tel: +90 326 2455813/1233,)

  • Ozturk, Ilhan

    () (Cag University, Faculty of Economics and Administrative Sciences, Mersin, Turkey. Tel:+903246514800, Fax:+903246514828.)

Abstract

Whether foreign direct investment (FDI) is beneficial to host country growth or not is a question debated since a long time. This paper provides a survey of the literature on FDI, export and growth, and empirically investigates the causal relationship between economic growth, export and FDI for the ten transition European countries (Bulgaria, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Slovak Republic and Slovenia). The ARDL bounds testing approach is used to investigate the existance of long-run relationship between FDI, export and economic growth for these countries. After detection of cointegratin relationship, the error-correction based Granger causality test is employed to examine the both long-run and short-run causality issues between the variables by using quarterly data from 1994 to 2008. These causality results reveal that there is causal relationship between FDI, export and economic growth in four out of ten countries considered.

Suggested Citation

  • Acaravci, Ali & Ozturk, Ilhan, 2012. "Foreign Direct Investment, Export and Economic Growth: Empirical Evidence from New EU Countries," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(2), pages 52-67, June.
  • Handle: RePEc:rjr:romjef:v::y:2012:i:2:p:52-67
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    References listed on IDEAS

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    Cited by:

    1. repec:rej:journl:v:19:y:2016:i:61:p:95-122 is not listed on IDEAS
    2. Liliana Scutaru, 2015. "The Structure And Territorial Dynamic Of Foreign Direct Investment In Romania," Annals - Economy Series, Constantin Brancusi University, Faculty of Economics, vol. 1, pages 185-190, February.
    3. Faik Bilgili & Nadide S. Tülüce & Ibrahim Doğan & H. Hilal Bağlıtas, 2016. "The causality between FDI and sector-specific production in Turkey: evidence from threshold cointegration with regime shifts," Applied Economics, Taylor & Francis Journals, vol. 48(5), pages 345-360, January.
    4. Mohammed Ershad Hussain & Mahfuzul Haque, 2016. "Foreign Direct Investment, Trade, and Economic Growth: An Empirical Analysis of Bangladesh," Economies, MDPI, Open Access Journal, vol. 4(2), pages 1-14, April.
    5. Genci Gjanҫi & Ardian Ҫërava, 2014. "The Role of FDI Inflow on the Post - Communist Albania’s Economic Growth," Journal of Knowledge Management, Economics and Information Technology, ScientificPapers.org, vol. 4(2), pages 1-6, April.
    6. Hela Bouras & Bechir Raggad, 2015. "Foreign Direct Investment and Exports: Complementarity or Substitutability An Empirical Investigation," International Journal of Economics and Financial Issues, Econjournals, vol. 5(4), pages 933-941.
    7. Irwan Shah Zainal Abidin & Muhammad Haseeb & Rabiul Islam, 2016. "Regional Integration of the Association of Southeast Asian Nations Economic Community: An Analysis of Malaysia - Association of Southeast Asian Nations Exports," International Journal of Economics and Financial Issues, Econjournals, vol. 6(2), pages 646-652.
    8. repec:aud:audfin:v:15:y:2017:i:146:p:218 is not listed on IDEAS
    9. repec:eco:journ1:2017-03-14 is not listed on IDEAS
    10. repec:agr:journl:v:xxiv:y:2017:i:2(611):p:263-276 is not listed on IDEAS
    11. Sallahuddin Hassan & Musa Murtala, 2016. "Market Size and Export-led Growth Hypotheses: New Evidence from Malaysia," International Journal of Economics and Financial Issues, Econjournals, vol. 6(3), pages 971-977.
    12. repec:eco:journ1:2017-04-65 is not listed on IDEAS

    More about this item

    Keywords

    FDI; causality; Bounds testing approach; export; economic growth; EU countries.;

    JEL classification:

    • C30 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - General
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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