TRADE OPENNESS, FDI AND ECONOMIC GROWTH A Panel Study

Abstract

The main purpose of this paper is to investigate the impact of FDI and trade openness on per capita GDP growth. For this purpose we used the data from 1971-2000 for 23 developed countries. The method, we used in this paper, is fixed effect and control set of variable. Results in both types of estimation methods are robust. In both type of method, we found openness is significant and positively affecting GDP per capita growth, while FDI appeared to be insignificant. We also test the granger causality among these variables. Only openness does cause GDP and reverse causality does not hold.