Foreign direct investment and economic growth: empirical analysis
Foreign direct investment and economic growth: empirical analysis

Summary/Abstract: Investments represent a factor of economic growth and development, regardless of their inter-nal or external origin. Foreign Direct Investments (FDI) represent a constituent of the total invest¬ments, meaning that they have a certain impact on economic growth. The existence of a positive correlation between the level of incoming foreign direct investment and economic growth in the economy is evident in numerous studies that explore this subject, but also there are the opposing views. That implies the need for further research to assess the relationship between these two categories. Therefore main objective of this paper is to estimate and show the impact of FDI on economic growth. This paper presents an empirical model (panel model with random effects) which analyzes the 84 countries in the forty-year period. The results suggest that there is statistically significant relationship between FDI inflows and economic growth rates, in conjunction with human capital, the trade openness and government consumption. The obtained findings suggest a lot of ideas for future research.

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