Regression Model Used in Analyzing the Effect of Foreign Direct Investment on Economic Growth

Abstract

FDI definitely influence economic growth. While analyzing the link between FDI and economic growth, we bear in mind that investments influence economic growth. Empirical studies reveal that FDI effect upon economic growth is positive. Studies show that there is a link between the two variables, although, due to the influence of other factorial variables, economic growth can be significant at times. In this paper, I have analyzed the link between the variable Foreign Direct Investment, considered to be factorial, and economic growth, the resultative variable. The quantitative study has been done with econometric models that can be used also to predict economic trends. That is why I have used the simple and multiple linear regression models.