Open Access
Article
SciPap-1344
Inward FDI and Economic Growth Nexus: A Case of Emerging Brazil from Latin America.
by
Farrukh Nawaz 1,* 
, Omar Mahmoud Al-Ammary 2 and Misbah Sadiq 3
1 Department of Economics, Al Qasimia University, Muwailh - University City, Sharjah 63000, United Arab Emirates
2 Department of Economics, Al Qasimia University, Muwailh - University City, Sharjah 63000, United Arab Emirates
3 Department of Economics, Al Qasimia University, Muwailh - University City, Sharjah 63000, United Arab Emirates
* Authors to whom correspondence should be addressed.
Abstract: Capital stock is possessing pivotal importance in stimulating the economic growth and development of any country. Inward FDI is considered as one of the important catalysts of economic development particularly for the resource and capital poor countries. In this article we have examined the relationship between inward FDI and economic growth in case of one of the emerging economies of Latin America i.e., Brazil. We took annual time series data for the dependent and independent variables like inward FDI, per capita Gross Domestic Product (GDP), employment, capital formation, and exports for the period ranging from 1996 to 2019. Initially, we applied Pearson Correlation test for examining the issue of Multicollinearity. Then we ran Ordinary Least Square Regression and Random Effect Regression Analysis for gauging the nature of relationship between the variables as well as for testing the robustness of the results. We found that FDI has a positive and significant relationship with GDP and the exports. Whereas, FDI has insignificant relationship with the employment and capital formation. The article holds an important policy implication for the other developing countries of Latin America; they need to attract good amount of inward FDI to achieve the robust economic growth and development.
Keywords: Economic Growth, Employment, Brazil, Inward Fdi, Exports, Capital Formation, Latin America.
JEL classification: F21 - International Investment • Long-Term Capital Movements, F23 - Multinational Firms • International Business, F43 - Economic Growth of Open Economies
Received: 23 July 2021 / Revised: 30 September 2021 / Accepted: 9 December 2021 / Published: 10 December 2021
