Bounds Testing Approach to Cointegration: An Examination of Foreign Direct Investment Trade and Growth Relationships

By O. Fosu, F. Magnus. 2006

253 citations recorded by the source corpus.

This study examines the long-run impact of foreign direct investment and trade on economic growth in Ghana. Using an augmented aggregate production function (APF) growth model, we apply the bounds testing (ARDL) approach to cointegration which is more appropriate for estimation in small sample studies. The data span for the study is from 1970 to 2002. We found cointegration relations between growth and its determinants in the APF model. The results indicated the impact of FDI on growth to be negative which is consistent with other past studies. Trade however was found to have significant positive impact on growth.

Subfields: Economics and Econometrics, Strategy and Management

View Paper: https://www.semanticscholar.org/paper/a8c376dbaaa284ab5498beeafb25a7a548a8d2c7

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In Economics and Econometrics

1. Md. Mahmudul Alam
2. A. Noman
3. M. W. Murad
4. Ilhan Ozturk
5. Muhammad Shahbaz
6. Anis Omri
7. Mantu Kumar Mahalik
8. Mahamat Hamit-haggar

In Strategy and Management

1. Ilhan Ozturk
2. Md. Mahmudul Alam
3. A. Noman
4. M. W. Murad

Citations in the corpus

• Relationships among carbon emissions, economic growth, energy consumption and population growth: Testing environmental Kuznets Curve hypothesis for Brazil, China, India and Indonesia (2016, methodology): “However, following Khan and Qayyum (2005) and Fosu and Magnus (2006), the ARDL version of the vector error correction model (VECM) can be specified as: The linear model: ∑ ∑ ∑ ∑ (1.1) The quadratic model: ∑ ∑ ∑ ∑ ∑ (2.1)”