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Output impacts of the interaction between foreign direct investment and domestic credit

Output impacts of the interaction between foreign direct investment and domestic credit PurposeThis paper aims to examine the link among foreign direct investment (FDI), domestic credit expansion and economic growth for six Pacific Island countries.Design/methodology/approachUsing panel data over 1982-2011, the authors relate the interaction between domestic credit to private sector and FDI to its impacts on output. This study makes use of panel cointegration and the generalized method of moments estimators.FindingsThe empirical results generally show that FDI and domestic credit to private sector serve as substitutes to promote output in these small economies. Such findings are robust to a number of sensitivity tests.Originality/valueThis study contributes to the literature by examining the interaction between domestic credit to private sector and FDI and its impact on output in small Pacific Island economies. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Studies in Economics and Finance Emerald Publishing

Output impacts of the interaction between foreign direct investment and domestic credit

Chen, Hong; Singh, Baljeet
Studies in Economics and Finance , Volume 34 (3): 13 – Aug 7, 2017
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References (67)

Publisher
Emerald Publishing
Copyright
Copyright © Emerald Group Publishing Limited
ISSN
1086-7376
DOI
10.1108/SEF-02-2016-0044
Publisher site
See Article on Publisher Site

Abstract

PurposeThis paper aims to examine the link among foreign direct investment (FDI), domestic credit expansion and economic growth for six Pacific Island countries.Design/methodology/approachUsing panel data over 1982-2011, the authors relate the interaction between domestic credit to private sector and FDI to its impacts on output. This study makes use of panel cointegration and the generalized method of moments estimators.FindingsThe empirical results generally show that FDI and domestic credit to private sector serve as substitutes to promote output in these small economies. Such findings are robust to a number of sensitivity tests.Originality/valueThis study contributes to the literature by examining the interaction between domestic credit to private sector and FDI and its impact on output in small Pacific Island economies.

Journal

Studies in Economics and Finance – Emerald Publishing

Published: Aug 7, 2017

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