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Title: | Assessing Foreign Direct Investment Long-Run Contribution to Financial Development: Evidence from Namibia |
Authors: | Gupta, P Jaezuruka, VM |
Keywords: | foreign direct investment;financial development;economic growth;human capital;ARDL bounds;Granger causality |
Issue Date: | 25-Nov-2020 |
Publisher: | Economics Bulletin |
Citation: | Gupta, P. and Jaezuruka, V.M. (2020) 'Assessing Foreign Direct Investment Long-Run Contribution to Financial Development: Evidence from Namibia', Economics Bulletin, 40 (4), pp. 3111 - 3123.. Available at: http://www.accessecon.com/Pubs/EB/2020/Volume40/EB-20-V40-I4-P271.pdf . |
Abstract: | We investigate the impact of Foreign Direct Investment on financial development using Domestic Credit to the Private Sector and Private Credit by Deposit money banks as a broader measure of financial indicators. We use the autoregressive distributed lag bounds co-integration analysis for long-run estimation on the Namibia economy as a case study for the periods 1990 to 2017. The Error Correction Model and the Granger causality approach are further used to examine the short-run dynamics and the direction of causality. Our results confirm the presence of a long-run association between FDI and financial development along with economic growth and human capital, the existence of uni-directional causal association from FDI to financial development measured in terms of domestic credit to the private sector, and bi-directional causation when measured in terms of private credit by deposit money banks. We conclude that FDI benefits Namibia financial system whilst playing a critical role in promoting human capital and economic development. Keywords: Foreign Direct Investment, Financial Development, Economic Growth, Human Capital, ARDL bounds, Granger Causality |
Description: | JEL: C3, E44, M5. |
URI: | https://bura.brunel.ac.uk/handle/2438/22235 |
ISSN: | 1545-2921 |
Other Identifiers: | ORCID iD: Prashant Gupta https://orcid.org/0000-0001-5401-5564 |
Appears in Collections: | Dept of Economics and Finance Research Papers |
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