Влияние прямых иностранных инвестиций на экономический рост в системах разного уровня/ The impact of foreign direct investment on economic growth in systems of different levels
Аннотация
The relevance of the work is determined by the study of FDI as a factor of economic development and their impact on economic growth in systems of different levels, both at the global level, at the national level, and at the enterprise level. There is a lot of scientific literature that examines various aspects of the relationship between FDI and economic growth.
Currently, there is no fundamental work in which the analysis of foreign direct investment as an indicator affecting the economies of developed and developing countries at the present stage is systematically and exhaustively presented. It is also worth noting that there are many different positions and conflicting opinions on this issue. Our study differs significantly from many other studies that have already been conducted on the impact of foreign direct investment on economic growth. This, in turn, allows us to develop a universal approach that determines the scientific novelty of this study.
The purpose of this research is to study the impact of foreign direct investment on economic growth in economic systems of different levels, as well as the relationship of FDI with sustainable development goals.
To achieve this research goal, it is necessary to solve the following tasks:
to study the economic literature, which is devoted to the study of the impact of FDI on economic growth and on the development of enterprises;
to analyze the literature and identify factors influencing economic growth based on existing research;
to collect, analyze and process data for research;
to conduct statistical and econometric analysis of developed and developing countries, analysis of the impact on the SDGs.
The object of this study is the world and national economies in modern conditions of development.
The subject of the study is foreign direct investment as a factor of economic growth in economic communities.
In the practical part of our work, we distinguish two econometric models: for developed and developing countries. 6 macroeconomic indicators were selected, namely GDP, FDI, unemployment rate, current account balance, inflation rate, trade volume for the period from 2005 to 2020. During the analysis, the Hausman test, collinearity test, heteroscedasticity test, etc. were used, as well as the GMM method are used to eliminate the problem of endogeneity.
The practical significance of the work lies in the fact that the results of the research part can be used in the field of economics for further research in the future. My recommendations on increasing the level of FDI are relevant today, and also touch on the topic of the current trend in achieving the SDGs.
Empirical base of the study:
the source is a database - the World Bank;
data from UNCTAD reports were used for statistical analysis;
fortune Global 500 Rating;
the list of corporate knights of the rating, based on the principles of ESG.
During the theoretical analysis, we came to the following conclusions:
FDI is an important factor in economic growth and has a significant impact on GDP growth in both developed and developing countries;
FDI at the expense of TNC benefits any economy in terms of technology transfer, skilled labor and skills, and also contributes to the country's foreign trade turnover;
FDI makes it possible to improve the quality and sustainability of the investment process in the national economy;
TNC FDI makes a significant contribution to the growth and development of not only enterprises, but also economic growth at the global level.
In the course of statistical analysis, we found that the indicators of FDI and GDP have undergone many ups and downs, which is explained by various crises, which also came as a shock to the global economy as a whole. We also determined the impact of FDI on economic growth using correlation analysis and concluded that the closeness of the relationship at the global level is higher than at the national level.
Moreover, the recent events with the pandemic that we have analyzed have had a negative impact not only on the dynamics of economic growth, but also on the dynamics of foreign direct investment at the global and national levels and specifically for developed and developing countries.
Also, we have considered a way to achieve the Sustainable Development Goals through responsible investments that take into account environmental, social and corporate governance factors, which will ensure better investment efficiency now and in the future and contribute to progress towards achieving the SDGs. However, the pandemic-related crisis has had a negative impact on FDI in the SDG sectors, namely infrastructure, water supply, food production, healthcare, etc., so this has slowed down the process of achieving the SDGs in recent years.
In addition, we conducted a correlation and regression analysis of the selected economic factors after conducting a theoretical analysis, and also took into account the problem of endogeneity in the model and ultimately used the best method to evaluate the model. The analysis was carried out to determine the impact of FDI on economic growth at various levels of the economy. Therefore, we conducted an analysis on the example of developed and developing countries.
Based on the GMM analysis, we conclude that the FDI indicator has a significant and positive impact on economic growth in developing countries and in developed countries. Moreover, the coefficient of this indicator is higher in developing countries, which suggests that GDP in these countries is growing faster and better from FDI. Consequently, the first hypothesis was fully confirmed.
We also found that the current account balance is significant only in developed countries, but has a positive impact on the economy in both groups of countries. Consequently, the second hypothesis was partially confirmed. As mentioned earlier, the positive indicator of this variable corresponds to the outflow of capital that is sent abroad in the form of foreign investments.
The export indicator has a significant impact in both developed and developing countries. In addition, the coefficient of this variable was positive in both groups of countries. Consequently, the arrival of TNCs in these countries has a positive impact on exports and leads to an increase in this indicator. Thus, the fourth hypothesis was fully confirmed.
Hypothesis 3 was also fully confirmed, since the unemployment rate has a negative impact in both groups of countries, since the coefficient in both models obtained during the analysis was negative. Moreover, this indicator is significant in both groups of countries selected for analysis.
Thus, out of all the expected hypotheses, 3 hypotheses were fully confirmed, but 1 hypothesis was partially confirmed.
Currently, there is no fundamental work in which the analysis of foreign direct investment as an indicator affecting the economies of developed and developing countries at the present stage is systematically and exhaustively presented. It is also worth noting that there are many different positions and conflicting opinions on this issue. Our study differs significantly from many other studies that have already been conducted on the impact of foreign direct investment on economic growth. This, in turn, allows us to develop a universal approach that determines the scientific novelty of this study.
The purpose of this research is to study the impact of foreign direct investment on economic growth in economic systems of different levels, as well as the relationship of FDI with sustainable development goals.
To achieve this research goal, it is necessary to solve the following tasks:
to study the economic literature, which is devoted to the study of the impact of FDI on economic growth and on the development of enterprises;
to analyze the literature and identify factors influencing economic growth based on existing research;
to collect, analyze and process data for research;
to conduct statistical and econometric analysis of developed and developing countries, analysis of the impact on the SDGs.
The object of this study is the world and national economies in modern conditions of development.
The subject of the study is foreign direct investment as a factor of economic growth in economic communities.
In the practical part of our work, we distinguish two econometric models: for developed and developing countries. 6 macroeconomic indicators were selected, namely GDP, FDI, unemployment rate, current account balance, inflation rate, trade volume for the period from 2005 to 2020. During the analysis, the Hausman test, collinearity test, heteroscedasticity test, etc. were used, as well as the GMM method are used to eliminate the problem of endogeneity.
The practical significance of the work lies in the fact that the results of the research part can be used in the field of economics for further research in the future. My recommendations on increasing the level of FDI are relevant today, and also touch on the topic of the current trend in achieving the SDGs.
Empirical base of the study:
the source is a database - the World Bank;
data from UNCTAD reports were used for statistical analysis;
fortune Global 500 Rating;
the list of corporate knights of the rating, based on the principles of ESG.
During the theoretical analysis, we came to the following conclusions:
FDI is an important factor in economic growth and has a significant impact on GDP growth in both developed and developing countries;
FDI at the expense of TNC benefits any economy in terms of technology transfer, skilled labor and skills, and also contributes to the country's foreign trade turnover;
FDI makes it possible to improve the quality and sustainability of the investment process in the national economy;
TNC FDI makes a significant contribution to the growth and development of not only enterprises, but also economic growth at the global level.
In the course of statistical analysis, we found that the indicators of FDI and GDP have undergone many ups and downs, which is explained by various crises, which also came as a shock to the global economy as a whole. We also determined the impact of FDI on economic growth using correlation analysis and concluded that the closeness of the relationship at the global level is higher than at the national level.
Moreover, the recent events with the pandemic that we have analyzed have had a negative impact not only on the dynamics of economic growth, but also on the dynamics of foreign direct investment at the global and national levels and specifically for developed and developing countries.
Also, we have considered a way to achieve the Sustainable Development Goals through responsible investments that take into account environmental, social and corporate governance factors, which will ensure better investment efficiency now and in the future and contribute to progress towards achieving the SDGs. However, the pandemic-related crisis has had a negative impact on FDI in the SDG sectors, namely infrastructure, water supply, food production, healthcare, etc., so this has slowed down the process of achieving the SDGs in recent years.
In addition, we conducted a correlation and regression analysis of the selected economic factors after conducting a theoretical analysis, and also took into account the problem of endogeneity in the model and ultimately used the best method to evaluate the model. The analysis was carried out to determine the impact of FDI on economic growth at various levels of the economy. Therefore, we conducted an analysis on the example of developed and developing countries.
Based on the GMM analysis, we conclude that the FDI indicator has a significant and positive impact on economic growth in developing countries and in developed countries. Moreover, the coefficient of this indicator is higher in developing countries, which suggests that GDP in these countries is growing faster and better from FDI. Consequently, the first hypothesis was fully confirmed.
We also found that the current account balance is significant only in developed countries, but has a positive impact on the economy in both groups of countries. Consequently, the second hypothesis was partially confirmed. As mentioned earlier, the positive indicator of this variable corresponds to the outflow of capital that is sent abroad in the form of foreign investments.
The export indicator has a significant impact in both developed and developing countries. In addition, the coefficient of this variable was positive in both groups of countries. Consequently, the arrival of TNCs in these countries has a positive impact on exports and leads to an increase in this indicator. Thus, the fourth hypothesis was fully confirmed.
Hypothesis 3 was also fully confirmed, since the unemployment rate has a negative impact in both groups of countries, since the coefficient in both models obtained during the analysis was negative. Moreover, this indicator is significant in both groups of countries selected for analysis.
Thus, out of all the expected hypotheses, 3 hypotheses were fully confirmed, but 1 hypothesis was partially confirmed.