September 2012
International Journal of Research in Commerce, IT & Management;Sep2012, Vol. 2 Issue 9, p66
Academic Journal
This paper investigates the relationship between Trade, Foreign Direct Investment (FDI), and Gross Domestic Product (GDP) for Singapore over the period 1970- 2010. The literature on Foreign Direct Investment (FDI), Trade and economic growth generally points to a positive Trade and Foreign Direct Investment (FDI)- Growth relationship. However, very few studies offer direct tests of causality to the three variables. The economic growth may induce trade and Foreign Direct Investment (FDI) stimulates economic growth. The present analysis focuses on Singapore, where growth of Exports has been the most pronounced. The Cointegration analysis suggested that there is a long-run equilibrium relationship. The results of Granger causality test showed that there is a causal relationship between the examined variables.


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