Abstract:

The research focuses on the link between foreign direct investment and economic growth in case of the G20 member countries, which represent the largest national economies worldwide, during the period 2000-2022. Empirical evidences through Panel EGLS (Cross-section weights) regression models with fixed-effects highlighted a positive and significant influence of foreign direct investment on economic growth in the presence of relevant variables from the economic environment such as research and development expenditures, government expenditures for education, population in the largest city, employment in agriculture, personal remittances received and renewable energy consumption. The causal relationship tested by Granger causality method is found to be unidirectional from investment to growth, but even so with a delay, in case of analyzed countries. The research targets the G20 members by highlighting the importance of attracting foreign direct investment in boosting economic growth globally and also macroeconomic decision-makers to own foreign direct investment in host countries.