Foreign Direct Investment and Economic Growth: Evidence from Asian Selected Countries
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Abstract
The purpose of this paper is to investigate the influence of foreign direct investment (FDI) on economic growth in Asian countries for the years 1980-2010. The IPS unit root test indicates that variables are stationary in level and Hausman test proves that we should apply the random effects model. Having estimated the model we come to the conclusion that FDI has positive and significant effect on economic growth and variables such as human capital, economic infrastructure and capital formation have positive effect on GDP. However, population, technology gap and inflation have negative effect on the economic growth.
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