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Causality analysis between FDI and economic growth: application in selected countries of MENA region

Author

Listed:
  • Ali Bouchrika

    (University of Gabes)

  • Wajdi Bardi

    (University of Gabes
    University of Carthage)

Abstract

This article focuses on the causality technique in a panel data model. The approach of Dumitrescu and Hurlin Testing for Granger non-causality in heterogeneous panels was used to test the (not) causality in the sense of Granger Testing for causality a personal view point between investment and economic growth in MENA countries, during the period from 1980 to 2021. Our empirical results show that foreign direct investment (FDI) has a significant effect on economic growth for a particular number of countries. Indeed, a test of non-causality in the Granger sense of FDI towards gross domestic product leads to rejection of the null hypothesis for eight countries of the study. On the other hand, economic growth can cause FDI only for two countries.

Suggested Citation

  • Ali Bouchrika & Wajdi Bardi, 2025. "Causality analysis between FDI and economic growth: application in selected countries of MENA region," SN Business & Economics, Springer, vol. 5(2), pages 1-12, February.
    • Handle: RePEc:spr:snbeco:v:5:y:2025:i:2:d:10.1007_s43546-024-00782-8
    DOI: 10.1007/s43546-024-00782-8
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    References listed on IDEAS

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    1. Mounir Belloumi & Kamel Touati, 2022. "Do FDI Inflows and ICT Affect Economic Growth? An Evidence from Arab Countries," Sustainability, MDPI, vol. 14(10), pages 1-21, May.
    2. Dumitrescu, Elena-Ivona & Hurlin, Christophe, 2012. "Testing for Granger non-causality in heterogeneous panels," Economic Modelling, Elsevier, vol. 29(4), pages 1450-1460.
    3. Michael Appiah & Bright Akwasi Gyamfi & Tomiwa Sunday Adebayo & Festus Victor Bekun, 2023. "Do financial development, foreign direct investment, and economic growth enhance industrial development? Fresh evidence from Sub-Sahara African countries," Portuguese Economic Journal, Springer;Instituto Superior de Economia e Gestao, vol. 22(2), pages 203-227, May.
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