Empirical Evidence on the Causality Relationship between Foreign Direct Investment and Economic Growth in the Developing Countries

The causality relationship between economic growth and foreign directinvestment has generated intense research interest. The empirical studyinvestigates the causal relationship between economic growth andforeign direct investment in 37 developing countries in multivariateframework. The majorjindings are, in most cases.foreign direct investmenthas no effect on economic growth. The study also found little evidencethat economic growth causes the inflow offoreign direct investment tothe developing countries.