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The relationship between Trade, FDI and Economic growth in Tunisia: An application of autoregressive distributed lag model

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  • Belloumi, Mounir

Abstract

This paper examines the dynamic causal relationships between foreign direct investment (FDI), trade and economic growth in Tunisia by applying the bounds testing (ARDL) approach to cointegration for the period from 1970 to 2008. The bounds tests suggest that the variables of interest are bound together in the long-run when foreign direct investment is the dependent variable. The associated equilibrium correction was also significant confirming the existence of long-run relationship. The results indicate also that there is no significant Granger causality from FDI to economic growth, from economic growth to FDI, from trade to economic growth and from economic growth to trade in the short run.

Suggested Citation

  • Belloumi, Mounir, 2012. "The relationship between Trade, FDI and Economic growth in Tunisia: An application of autoregressive distributed lag model," Conference papers 332240, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    • Handle: RePEc:ags:pugtwp:332240
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