Correlates of Economic Growth in Developing Countries: A Panel Cointegration Approach

24 Pages Posted: 2 Jun 2009 Last revised: 23 Feb 2011

See all articles by James P. Neelankavil

James P. Neelankavil

Zarb School of Business, Hofstra University

Lonnie K. Stevans

Hofstra University - Frank G. Zarb School of Business

Francisco L. Roman

W.SyCip Graduate School of Business

Date Written: June 1, 2009

Abstract

The inflow of foreign direct investment (FDI) has been found to play a crucial role in the economic growth of receiving countries. Using panel cointegration techniques, this perception was found to be mitigated by an empirical approach that yields different results from previous studies. While the growth in real FDI has an influence on real GDP growth across developing countries in the short-run, year-to-year periods, it does not explain real GDP in the long-run. Rather, it appears to be the economic factors internal to a country that have the most influence on real GDP over time: human capital (measured by literacy rates), export trade, and monetary and fiscal policy.

Keywords: Development, Economic Growth, Panel Cointegration, Unit Roots, Foreign Direct Investment

JEL Classification: C33, F30, O16, O23, O53, O54, O55

Suggested Citation

Neelankavil, James P. and Stevans, Lonnie K. and Roman, Francisco L., Correlates of Economic Growth in Developing Countries: A Panel Cointegration Approach (June 1, 2009). International Review of Applied Economics, Forthcoming, Available at SSRN: https://ssrn.com/abstract=1412723

James P. Neelankavil

Zarb School of Business, Hofstra University ( email )

Hempstead, NY 11549
United States

Lonnie K. Stevans (Contact Author)

Hofstra University - Frank G. Zarb School of Business ( email )

Department of IT/QM
134 Hofstra University
Hempstead, NY 11549
United States
516-463-5375 (Phone)

HOME PAGE: http://www.lonniestevans.com

Francisco L. Roman

W.SyCip Graduate School of Business ( email )

United States

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