Abstract:

The aim of this paper is to measure the impact of foreign direct investment on economic growth in case of G7 countries, during more than last 20 years. Based on the world’s advanced economies, the empirical analysis highlights the benefits of the foreign direct investment on economic growth, using the Panel EGLS (Cross-section random effects) regression method. The findings reveal that there is a positive and significant impact of investments on economic growth of G7 countries, FDI being one of the most important triggers of economic growth evolution. It has also been empirically proven that renewable energy consumption and research and development expenditure are important factors that accelerate the economic growth of these countries. In terms of a macroeconomic perspective, the evidence should be considered as part of the decision-making process and future investing implications worldwide since the analysis covers the behavior of leading industrial countries.