Impact of Foreign Direct Investment (FDI) and Information Communication Technology (ICT) on economic growth (PDF)

Academic Paper from the year 2018 in the subject Economics - Economic Cycle and Growth, grade: 1.3, University of Wuppertal, language: English, abstract: The main aim and purpose of this seminar is to examine, analyze and present the impact of FDI Inward stock and ICT capital on the economic growth of an economy considering the sample countries. As a general structure, the essay would first give an introduction about economic Globalization and its indicators particularly focusing on FDI and ICT. On the literature review part of the essay, cited definitions and theoretical background of FDI and ICT are presented. In an attempt to strengthen the essay, a brief insight into Economic growth and the linkage between FDI, ICT and economic growth is included. The empirical analysis of this essay investigates econometric relations and presents econometric results from the conducted analysis based on the collected data from the sample countries. Growth accounting approach using supply-side Cobb-Douglas production function is applied to look at the economic impact of growth rate of FDI Inward stock and growth rate of ICT capital on economic growth.

The econometric analysis is structured in a way to first look at the separate impacts of the two independent variables on economic growth which is measured by growth rate of real GDP. Secondly, as a final model, the combined impact of the two independent variables on the growth rate of real GDP is presented and discussed. Standard panel data models are applied to investigate the empirical relationship pertaining to the selected BRICS countries (Brazil, Russia, India, China and South Africa). Data collected from year 1995 to 2015 is considered for the forthcoming econometric analysis. Finally, a summary of the work with conclusion and policy recommendation is given.