Short and long-run linear and nonlinear causality between FDI and GDP for the US Online publication date: Tue, 15-Oct-2019
by Ilias A. Makris; Stavros Stavroyiannis
International Journal of Economics and Business Research (IJEBR), Vol. 18, No. 4, 2019
Abstract: Recent severe recessions demonstrated an urgent need for identifying and forecasting on the impact of specific macroeconomic indicators such as investment spending which is crucial for growth. Many researchers focus on the contribution of foreign investment (FDI) in recipient economies; however, findings are not clear, on whether the relation is bi-directional or not. That is, whether FDI affects growth, or it is growth that attracts FDI. The purpose of this work is to examine the direction of short and long-run causality of quarterly data of the US gross domestic product (GDP), and the rest of the world, foreign direct investments (FDI) in the US. A well-specified vector error correction model (VECM) identifies a unidirectional short and long-run causality from FDI to GDP. Furthermore, the use of the non-parametric Diks and Panchenko (2006) nonlinear causality test shows a unidirectional short and long-run nonlinear in nature remaining causality from FDI to GDP.
Existing subscribers:
Go to Inderscience Online Journals to access the Full Text of this article.
If you are not a subscriber and you just want to read the full contents of this article, buy online access here.Complimentary Subscribers, Editors or Members of the Editorial Board of the International Journal of Economics and Business Research (IJEBR):
Login with your Inderscience username and password:
Want to subscribe?
A subscription gives you complete access to all articles in the current issue, as well as to all articles in the previous three years (where applicable). See our Orders page to subscribe.
If you still need assistance, please email subs@inderscience.com
Our Blog 
Follow us on Twitter 
Visit us on Facebook