The purpose of this study is to evaluate if FDI can be used as a proverbial ‘another arrow in the quiver’ for boosting economic growth. The research topic at hand asks if a positive regression can be observed between the employment of external market forces, specifically FDI, and economic growth. The study covers Singapore and South Korea during the period 1972-2019. The theoretical framework includes Solow’s exogenous growth theory, Romer’s endogenous growth theory and the OLI-theory. These theories provide the mechanism and context which explains how FDI can affect an economy, these include capital accumulation and non-rivalising ideas. The data has been tested to see if it complies with the classical assumption of linear regression. The analysis is based on multiple variable regression where a new independent variable is presented for each new regression that is made. The results show that there is no statistically significant coefficient in the regression model between FDI-inflow and economic growth in both countries during the specified time period. This result occurred because the FDI variable for the multiple regressions for each country usually does not show a statistically significant result. This means that the coefficient values presented in the regressions cannot be interpreted as facts because they do not reach the confidence interval below 5% to be seen as trustworthy results.
| Identifer | oai:union.ndltd.org:UPSALLA1/oai:DiVA.org:sh-46732 |
| Date | January 2021 |
| Creators | Kordi, Aran, Zizak, Filip |
| Publisher | Södertörns högskola, Nationalekonomi |
| Source Sets | DiVA Archive at Upsalla University |
| Language | Swedish |
| Detected Language | English |
| Type | Student thesis, info:eu-repo/semantics/bachelorThesis, text |
| Format | application/pdf |
| Rights | info:eu-repo/semantics/openAccess |
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