This study investigates the effects of foreign direct investments (FDI) on the export and gross domestic product (GDP) in the original fragile five countries for the period 1990-2017. For the sake of the analysis, annual data is used and two econometric models are utilized to determine the stationary of variables, their long-term relationship, regression coefficients, and causality relationship between variables. The regression results indicate that a 1% rise in FDI stock increases exports by 0.06% where a 1% rise in imports increases exports by 0.81%. On the other hand, a 1% growth in FDI increases GDP by 0.12% where a 1% rise in exports, increase GDP by 0.79%. The causality test results show that there is a bidirectional relationship between FDI and Imports and GDP, unidirectional relationship from FDI to exports, and bidirectional relationship between GDP and exports.
|Publication Date||April 28, 2022|
|Published in Issue||Year 2022 Volume: 9 Issue: 1|
Attribution-NonCommercial-NoDerivatives 4.0 International (CC BY-NC-ND 4.0)