Testing for causality between FDI and economic growth using heterogeneous panel data

Melisa Chanegriha (), Chris Stewart and Christopher Tsoukis
Additional contact information
Melisa Chanegriha: Middlesex University, Postal: Economics and International Development, Business School, Middlesex University, Hendon, campus, The Burroughs, London NW4 4BT, UK;

No 2018-4, Economics Discussion Papers from School of Economics, Kingston University London

Abstract: In this paper we investigate the causal relationship between the ratio of FDI to GDP (FDIG)and economic growth (GDPG). We use innovative econometric methods which are based on the heterogeneous panel test of the Granger non-causality hypothesis based on the works of Hurlin (2004a), Fisher (1932, 1948) and Hanck (2013) using data from 136 developed and developing countries over the 1970-2006 period. According to the Hurlin and Fisher panel tests FDIG unambiguously Granger-causes GDPG for at least one country. However, theresults from these tests are ambiguous regarding whether GDPG Granger-causes FDIG for at least one country. Using Hanck’s (2013) panel test we are able to determine whether and for which countries there is Granger-causality. This test suggests that at most there are three countries (Estonia, Guyana and Poland) where FDIG Granger-causes GDPG and no countries where GDPG Granger-causes FDIG.

Keywords: Granger-causality Tests; Panel Data; FDI; Economic Growth (search for similar items in EconPapers)
JEL-codes: C33 F21 F43 N10 (search for similar items in EconPapers)
Pages: 28 pages
Date: 2018-05-23
New Economics Papers: this item is included in nep-fdg, nep-gro, nep-his and nep-int
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://staffnet.kingston.ac.uk/~ku33681/RePEc/kin/papers/2018_004.pdf Full text (application/pdf)

Related works:
Journal Article: Testing for causality between FDI and economic growth using heterogeneous panel data (2020)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ris:kngedp:2018_004

Access Statistics for this paper

More papers in Economics Discussion Papers from School of Economics, Kingston University London Kingston University London, School of Economics, Penrhyn Road, Kingston upon Thames, Surrey, KT1 2EE, UK. Contact information at EDIRC.
Bibliographic data for series maintained by Andrea Ingianni ().