Title: The effects of foreign direct investment, external debts and trade openness on economic growth: evidence from the Ottoman Empire 18811913
Authors: Lotfi Demikha; Amir Bin Shaharuddin; Abdul Rahim Ridzuan
Addresses: Faculty of Economics and Muamalat, Universiti Sains Islam Malaysia, 71800, Malaysia ' Faculty of Economics and Muamalat, Universiti Sains Islam Malaysia, 71800, Malaysia ' Faculty of Business and Management, Universiti Teknologi MARA, Melaka Campus, 78000, Malaysia
Abstract: This paper empirically examines the impact of foreign direct investment, external debts, and trade openness on economic growth in the Ottoman Empire. The existing literature lacks a comprehensive quantitative analysis on this pattern. Indeed, a great focus was given to the Ottoman Empire history, but minimal attention was directed to the financial performance of the Ottoman economy during the last quarter of the 19th century. This study utilises the time-series technique autoregressive distributed lag model (ARDL) on macroeconomic data for the period 18811914. The study reveals a significant positive effect of external debt, trade openness, and government expenditure on economic growth. The obtained results also highlight the fact that foreign direct investment and inflation showed a significant negative impact on economic growth. Our findings recommend on focusing on adopting economic policies that promote generating funds using local sources instead of relying on external funders to boost economic development.
Keywords: ARDL; autoregressive distributed lag model; economic growth; Ottoman Empire; FDI; foreign direct investment; external debts; trade openness; macroeconomic; terms of trade.
International Journal of Economics and Business Research, 2021 Vol.21 No.3, pp.387 - 410
Received: 05 Dec 2019
Accepted: 14 Apr 2020
Published online: 26 Feb 2021 *