THE COMPARATIVE ANALYSIS OF FDI AND REMITTANCE EFFECT ON ECONOMIC GROWTH IN CENTRAL ASIA
Keywords:
Foreign Direct Investment, International Remittances, Economic Growth, Central Asia, GDP, Trade Openness, Population Growth, Panel Data, Economic Development, FDI.Abstract
The principal target of this empirical study is to deliver an investigation to analyse the effect of Foreign Direct Investment and International remittances on economic growth of the nations situated in Central Asia for the years 2009 – 2019. The panel data for the study was extracted from the World Bank Statistics. Gross Domestic product was chosen as dependent variable, while Foreign Direct Investment, International Remittances, Trade openness, Population growth indicators were selected as independent variables. The existing research analysis showed that the influence of FDI on economic progress is positive, while, mixed results have been found for the impact of International Remittances on economic growth. The regression analysis of econometric model was obtained from the following employed models: Ordinary Least Squares (OLS), Random Effects, Fixed Effects, GLS model. In order to avoid from the issues of multicollinearity, heteroscedasticity, cross-sectional dependence, some important diagnostic tests were conducted. The empirical findings of the study reveals that the FDI acquires statistically significant and positive relationship with economic growth, whilst, international remittances, population growth, trade have a statistically insignificant and negative correlation with economic development. It concludes that Foreign Direct Investment plays a key role in boosting the economic development of the selected countries.
Downloads
References
Ammari, A., 2021. Panel Data Analysis; Fixed and Random Effects using Stata (Oscar Torres-Reyna version). [online] Princeton.edu. Available at: https://www.princeton.edu/~otorres/Panel101.pdf
A. Ek, 2007. The Impact of FDI on Economic Growth, The Case of China
Available at:https://www.diva-portal.org/smash/get/diva2:3474/FULLTEXT01.pdf
Dr. J, Ferdaous, 2016. Impact of Remittances and FDI on Economic Growth: A Panel Data Analysis. Available at: https://www.researchgate.net/publication/337532597_Impact_of_Remittances_and_FDI_on_Economic_Growth_A_Panel_Data_Analysis
E. Nketiah, 2019. Foreign Direct Investment, Trade Openness and Economic Growth: Evidence from Ghana. Vol 3, pp 145-153.
H. Green, 2002. Econometric analysis fifth edition. Available at:
Maalej, A., 2007. The Impact of FDI on Economic Growth: A Panel Data Estimation. Available at: https://www.researchgate.net/publication/334114767_The_impact_of_FDI_on_Economic_Growth_Panel_Data_Estimation
Mehdi Behname, 2012. Foreign Direct Investment and Economic Growth: Evidence from Southern Asia Atlantic Review of Economics. 2nd Volume, pp 136-144.
https://ideas.repec.org/a/eac/articl/10-11.html
M. Ekanayake, 2019. Do Remittances Promote Economic Growth and Reduce Poverty? Evidence from Latin American Countries.
Available at: https://www.mdpi.com/2227-7099/8/2/35/htm
Hausman, 1978. Specification Tests in Econometrics: An explanation of models. pp. 112-120
Available at: https://econpapers.repec.org/article/ecmemetrp/v_3a46_3ay_3a1978_3ai_3a6_3ap_3a1251-71.htm
K. Lyroudi, 2004. Foreign Direct Investment And Economic Growth In Transition Economies.Available at: https://econpapers.repec.org/article/sebjournl/v_3a2_3ay_3a2004_3ai_3a1_3ap_3a97-110.htm
Sanjaya Kumar Lenka, 2013. FDI as a Main Determinant of Economic Growth: A Panel Data Analysis. Available from:
https://www.scmspune.ac.in/chapter26/7.pdf
Smith, 2006. Economic Development, a cumulative explanation of policies in Europe.
Available at: https://www.perlego.com/book/1365874/economic-development-pdf
Solow, 1957. Technical change and the aggregate production function The Review of Economics and Statistics. Vol. 39, pp. 311-319
Available at: http://www.piketty.pse.ens.fr/files/Solow1957.pdf [Accessed 9th March 2021]
Sh. Shaari, 2012. Foreign Direct Investment and Economic Growth: Evidence from Malaysia. Available at:
Available from: http://unstats.un.org/unsd/tradeserv/tsg3- feb06/tsg0602-14.pdf
Lehnert, K. 2013. Financing Growth: Comparing the Effects of FDI, 52 ODA and International Remittances. Available at:
https://ideas.repec.org/a/jed/journl/v38y2013i2p43-65.html
Nowbutsing 2009. FDI, and Economic Growth: A Theoretical Framework.
Available from: https://smartech.gatech.edu/bitstream/handle/1853/35284/1245002088_BN_1.pdf
M. Adhikary 2010. FDI, Trade Openness, Capital Formation, and Economic Growth in Bangladesh. International Journal of Business and Management. Available at: https://www.researchgate.net/publication/49596169_FDI_Trade_Openness_Capital_Formation_and_Economic_Growth_in_Bangladesh_A_Linkage_Analysis
Kortajas Fukasaku, 2010 Foreign Direct Investment and Economic Growth: A Comparative Study among East Asian Countries. Available at: https://www.oecd.org/dev/34982822.pdf
Ukkeje, 2013, Workers’ Remittances – Economic Growth Nexus: Evidence from Nigeria, Using An Error Correction Methodology. Available at: http://www.ijhssnet.com/journals/Vol_3_No_7_April_2013/24.pdf
