Open AccessOpenness and Economic Growth: Empirical Evidence On The Relationship Between Output, Inward FDI, and Trade
Author(s) -
E. M. Ekanayake,
Richard M. Vogel,
Bala Veeramacheneni
Publication year - 1970
Publication title -
journal of business strategies
Language(s) - English
Resource type - Journals
eISSN - 2162-6901
pISSN - 0887-2058
DOI - 10.54155/jbs.20.1.59-72
Subject(s) - openness to experience , economics , foreign direct investment , cointegration , causality (physics) , granger causality , error correction model , international economics , empirical evidence , vector autoregression , macroeconomics , econometrics , monetary economics , psychology , social psychology , philosophy , epistemology , physics , quantum mechanics
The relationship between openness and economic growth in developed anddeveloping countries has been of continuing interest in both the theoretical andempirical literature. In this paper. we employ a vector autoregressive (VAR)model and error correction techniques to test for the existence and nature of thecausal relationship between output level, inward FDI and exports across across-section of both developed and developing countries using data from 1960-2001.Our main objective is to analyze the extent and sources of internationallinkages between openness and economic performance. The evidence supportshi-directional causality between exports growth and economic growth; the economicgrowth and FDI relationship has mixed results.