Abstract:

This study presents an empirical analysis of the influence that foreign direct investments have on economic growth, in case of a group of nine emerging countries from Europe, during the years 1997-2020. The research includes a literature review and an econometric study using multiple panel regressions with fixed effects to capture the impact of investments on economic growth in the presence of some control variables, but also testing Granger causality to determine what kind of relationship exists between the two variables of interest. The study highlighted that foreign direct investments positively and significantly impact the economic growth in the countries analyzed and showed that there is no causal relationship between the two variables up to lag 10 where there is a unidirectional causality from economic growth to foreign direct investments.