{"title":"Foreign Direct Investment-Growth Nexus in BRICS: How Relevant are the Absorption Capacities?","authors":"Kunofiwa Tsaurai","doi":"10.47743/saeb-2023-0006","DOIUrl":null,"url":null,"abstract":"This study examined the impact of foreign direct investment on economic growth in BRICS using fixed effects, dynamic ordinary least squares (DOLS) and fully modified ordinary least squares (FMOLS). Panel data ranging from 1991 to 2019 was used for the purposes of this study. The same study also explored whether financial sector and human capital development are necessary absorption capacities that enhance economic growth in BRICS. To a larger extent, foreign direct investment had a negative impact on economic growth in BRICS, consistent with the dependency theory. Financial development was also found to be the channel through which economic growth is enhanced by foreign direct investment. Although the influence was observed to be non-significantly negative, human capital development improved the influence of foreign direct investment on economic growth. BRICS authorities are therefore urged to implement human capital and financial development enhancement policies to ensure significant foreign direct investment’s positive influence on economic growth.","PeriodicalId":43189,"journal":{"name":"Scientific Annals of Economics and Business","volume":" ","pages":""},"PeriodicalIF":0.9000,"publicationDate":"2023-03-20","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Scientific Annals of Economics and Business","FirstCategoryId":"1085","ListUrlMain":"https://doi.org/10.47743/saeb-2023-0006","RegionNum":0,"RegionCategory":null,"ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q3","JCRName":"ECONOMICS","Score":null,"Total":0}
引用次数: 0
Abstract
This study examined the impact of foreign direct investment on economic growth in BRICS using fixed effects, dynamic ordinary least squares (DOLS) and fully modified ordinary least squares (FMOLS). Panel data ranging from 1991 to 2019 was used for the purposes of this study. The same study also explored whether financial sector and human capital development are necessary absorption capacities that enhance economic growth in BRICS. To a larger extent, foreign direct investment had a negative impact on economic growth in BRICS, consistent with the dependency theory. Financial development was also found to be the channel through which economic growth is enhanced by foreign direct investment. Although the influence was observed to be non-significantly negative, human capital development improved the influence of foreign direct investment on economic growth. BRICS authorities are therefore urged to implement human capital and financial development enhancement policies to ensure significant foreign direct investment’s positive influence on economic growth.
期刊介绍：
The Journal called Scientific Annals of Economics and Business (formerly Analele ştiinţifice ale Universităţii "Al.I. Cuza" din Iaşi. Ştiinţe economice / Scientific Annals of the Alexandru Ioan Cuza University of Iasi. Economic Sciences), was first published in 1954. It is published under the care of the Alexandru Ioan Cuza University, the oldest higher education institution in Romania, a place of excellence and innovation in education and research since 1860. Throughout its editorial life, the journal has been continuously improving. Renowned professors, well-known in the country and abroad, have published in this journal. The quality of the published materials is ensured both through their review by external reviewers of the institution and by the editorial staff that includes professors for each area of interest. The journal published papers in the following main sections: Accounting; Finance, Money and Banking; Management, Marketing and Communication; Microeconomics and Macroeconomics; Statistics and Econometrics; The Society of Knowledge and Business Information Systems.
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