<abstract xmlns="http://www.w3.org/1999/xhtml">

<sec><h3>Subject and purpose of work</h3>
<p>In recent years, the competition for economic dominance globally has led developed economies increasingly to focus on outward foreign direct investment (FDI) and exports to other developing nations. However, there has been a notable research gap, with most studies concentrating on assessing the significance of FDI and trade openness in developing countries, while less attention has been paid to developed countries. This study explores the relationship between FDI and trade openness with economic growth in six developed economies.</p>
</sec>
<sec><h3>Material and methods</h3>
<p>Utilising annual data spanning from 1990 to 2022 from the World Bank, the study employs the panel Autoregressive Distributed Lag (ARDL) method for analysis.</p>
</sec>
<sec><h3>Results</h3>
<p>The estimated results indicate a negative long-run relationship and a positive short-run effect of FDI in the selected economies. Furthermore, the findings reveal a positive long-run association and a negative short-run impact of trade openness. The causality test indicated a bidirectional relationship between trade openness and economic growth.</p>
</sec>
<sec><h3>Conclusions</h3>
<p>The study suggests that various governments should enhance their investment environments to leverage the benefits of FDI inflows.</p>
</sec>
</abstract>

Subject and purpose of work
In recent years, the competition for economic dominance globally has led developed economies increasingly to focus on outward foreign direct investment (FDI) and exports to other developing nations. However, there has been a notable research gap, with most studies concentrating on assessing the significance of FDI and trade openness in developing countries, while less attention has been paid to developed countries. This study explores the relationship between FDI and trade openness with economic growth in six developed economies.

Material and methods
Utilising annual data spanning from 1990 to 2022 from the World Bank, the study employs the panel Autoregressive Distributed Lag (ARDL) method for analysis.

Results
The estimated results indicate a negative long-run relationship and a positive short-run effect of FDI in the selected economies. Furthermore, the findings reveal a positive long-run association and a negative short-run impact of trade openness. The causality test indicated a bidirectional relationship between trade openness and economic growth.

Conclusions
The study suggests that various governments should enhance their investment environments to leverage the benefits of FDI inflows.

The relationship between foreign direct investment and trade openness: Evidence from six developed economies

Economic and Regional Studies / Studia Ekonomiczne i Regionalne

This work is licensed under the Creative Commons Attribution 4.0 International License.

Subject and purpose of work
In recent years, the competition for economic dominance globally has led developed economies increasingly to focus on outward...

The relationship between foreign direct investment and trade openness: Evidence from six developed economies

Published Online: Jul 11, 2024

Page range: 222 - 250

Received: Apr 01, 2024

Accepted: Jun 01, 2024

DOI: https://doi.org/10.2478/ers-2024-0013

Keywords
FDI, GDP per capita, trade openness, economic growth, CO emission, government debt

© 2024 Evans Yeboah, published by Sciendo

This work is licensed under the Creative Commons Attribution 4.0 International License.

The relationship between foreign direct investment and trade openness: Evidence from six developed economies

Published Online: Jul 11, 2024

Page range: 222 - 250

Received: Apr 01, 2024

Accepted: Jun 01, 2024

DOI: https://doi.org/10.2478/ers-2024-0013

KeywordsFDI, GDP per capita, trade openness, economic growth, CO emission, government debt

© 2024 Evans Yeboah, published by Sciendo

This work is licensed under the Creative Commons Attribution 4.0 International License.

Keywords
FDI, GDP per capita, trade openness, economic growth, CO emission, government debt