The goal of this research is to investigate the relationship between economic growth and foreign direct investment inflows in the European Union (EU-28) in the period of the recent economic crisis. Panel data approach and Bayesian techniques are employed to solve the problem of a short set of data (2008–2014). The panel data approaches (panel vector-autoregressive model and Bayesian random effect models) identified a reciprocal and positive relationship between FDI and economic growth in EU-28 starting with 2008. The individual approach based on Bayesian linear regressions identified this tendency as being specific for most of the EU-28 countries. However, there are some countries for which higher FDI did not generate economic growth and some countries where higher GDP did not attract more FDI and FDI did not bring economic growth. According to cluster analysis, the disparities among countries regarding the FDI distribution according to GDP growth and GDP rate distribution according to FDI diminished in 2014 compared to 2008. The basic conclusion is that on overall in the European Union there was a reciprocal relationship between economic growth and FDI since the beginning of the crisis with a tendency of reducing disparities between countries in attracting FDI.
The relation between economic growth and foreign direct investment during the economic crisis in the European Union
Published 2016 in Zbornik radova Ekonomskog fakulteta u Rijeci : časopis za ekonomsku teoriju i praksu
ABSTRACT
PUBLICATION RECORD
- Publication year
2016
- Venue
Zbornik radova Ekonomskog fakulteta u Rijeci : časopis za ekonomsku teoriju i praksu
- Publication date
2016-07-27
- Fields of study
Economics
- Identifiers
- External record
- Source metadata
Semantic Scholar
CITATION MAP
EXTRACTION MAP
CLAIMS
CONCEPTS
- bayesian linear regressions
Bayesian regression models used at the individual-country level to estimate associations between variables.
Aliases: Bayesian regression
- bayesian random effect models
Bayesian panel models that include country-specific random effects to capture unobserved heterogeneity.
Aliases: Bayesian random-effects models
- cluster analysis
A grouping method used to compare countries based on similarities in FDI and GDP-growth distributions.
Aliases: clustering
- economic growth
The increase in economic output over time, represented in the abstract through GDP growth.
Aliases: GDP growth, growth
- eu-28
The European Union member-state group of 28 countries analyzed in the paper.
Aliases: European Union, European Union-28, EU 28
- foreign direct investment inflows
Cross-border investment capital entering a country or region from foreign investors.
Aliases: FDI inflows, FDI
- gross domestic product
The total value of goods and services produced, used here as a measure linked to economic growth or GDP rate.
Aliases: GDP
- panel vector-autoregressive model
A panel-data time-series model used to examine dynamic relationships among variables across countries.
Aliases: panel VAR, PVAR
REFERENCES
Showing 1-32 of 32 references · Page 1 of 1
CITED BY
Showing 1-71 of 71 citing papers · Page 1 of 1