Causality among Foreign Direct Investment and Economic Growth: A Directed Acyclic Graph Approach

With the aim of examining the causal structure between foreign direct investment (FDI) and economic growth, this study derives inductive causal inference using the directed acyclic graph approach, which makes no a priori causal assumptions. There are three major findings of this study. First, economic growth causes FDI inflows for developing countries, whereas FDI induces economic growth for developed countries. Second, trade is an important intermediary to facilitate the interaction between FDI and other factors. Third, the stock market is found to be an intermediary that amplifies the influence on FDI from many causal variables of FDI for developed countries.


Editor(s):
Marchant, Mary A.
Bosch, Darrell J.
Issue Date:
Nov 01 2013
Publication Type:
Journal Article
PURL Identifier:
http://purl.umn.edu/157392
Published in:
Journal of Agricultural and Applied Economics, Volume 45, Number 4
Page range:
617-637
Total Pages:
20
JEL Codes:
F21
Series Statement:
45
4




 Record created 2017-04-01, last modified 2017-08-27

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