FDI and sustainable economic growth: evidence from Belt and Road initiative

Nilufar Ismailova

FDI and sustainable economic growth: evidence from Belt and Road initiative

Авторы

Nilufar Ismailova

Ключевые слова:

Foreign direct investment, economic sustainability, Belt and Road initiative

Аннотация

This paper investigates the relationship between foreign direct investment and
economic growth in Belt and Road countries during 1990-2018. Our findings
suggest that a 10% increase in FDI relative to GDP is associated with only 0.9
percentage points increase in GDP growth. The results are held after including
control variables. The results can be explained based on the facts that forces
investors and companies to invest their money in foreign projects including
relatively lower cost of deployment, the access to resources, favorable financial
environment and developed financial markets. Future research on the FDI-growth
nexus in Belt and Road countries should focus on causal relationships and possible
indirect channels through which FDI may affect economic growth.

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FDI and sustainable economic growth: evidence from Belt and Road initiative