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Asian Journal of Research in Business Economics and Management
Year : 2013, Volume : 3, Issue : 11
First page : ( 338) Last page : ( 347)
Online ISSN : 2249-7307.

FDI and Economic Growth in Asian Developing Countries: A Toda-Yamamoto Approach

Mahmoodi Elahe, Mahmoodi Majid

Young Researchers and Elite Club, Zahedan Branch, Islamic Azad University, Zahedan, Iran

JEL classifications: C32, F21, F43

Online published on 7 November, 2013.

Abstract

The aim of this paper is to examine the causality relationship between foreign direct investment and economic growth for 15 Asian developing countries from 1980 to 2010 years. The ARDL-Bounds test proposed by Pesaran et al. (2001) employed to analyze long-run cointegration relationship. Furthermore, a modified version of Granger causality test proposed by Toda and Yamamoto (1995) used to examine the causal relationship. The result of causality is mixed for different countries. Identify the direction of causality can be useful for policymakers and economist.

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Keywords

Foreign Direct Investment, Economic Growth, Causality.

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