Authors : Preeti Flora and Gaurav Agrawal
Abstract: Foreign Direct Investment (FDI) is considered as one of the major catalyst that induces and accelerates economic growth and development of an economy. This study examines the relationship between FDI and economic growth in the 6 highest FDI recipient Asian emerging economies. Asian emerging economies selected for conducting the study include China, India, Malaysia, Thailand, Singapore and Saudi Arabia while time period chosen for the study ranged between 1985-2011. To investigate the proposed relationship the study was conducted at both panel and individual county level with a view to provide a comparative empirical analysis, based on cointegration and causality test. Researchers conclude that FDI and economic growth are co-integrated at the panel level and thus, have a long-run relationship in these economies. These conclusions were further supported by confirming bidirectional causality through the results of Vector Error Correction Model (VECM) and Granger Causality analysis.
Preeti Flora and Gaurav Agrawal, 2014. Foreign Direct Investment (FDI) and Economic Growth Relationship Among Highest FDI Recipient Asian Economies: A Panel Data Analysis. International Business Management, 8: 126-132.