Journal of Economics and Development Studies

An Empirical Examination to Determine Whether Foreign Direct Investment Influences Economic Growth in Developing Countries
Julia Velaj

Abstract
Foreign Direct Investment is widely recognised in economic literature as a key factor for fostering economic growth. However, some studies have revealed contradictory results. This study aims to test the theory that FDI contributes to a country's economic growth. The research was conducted using panel data on 60 developing countries from 1990 to 2019. The findings confirmed an affirmative correlation between the two variables as the value for foreign direct investment is positive and statistically significant. Additionally, our results show a developing nation’s characteristics such as its human capital, can attract foreign investment, consequently fostering economic development. We conclude that the alternative hypothesis is accepted, along with the conclusion that the host country attributes play an essential part in facilitating the positive influence of foreign direct investment on the development of an economy.

Full Text: PDF     DOI: 10.15640/jeds.v10n1a4