The impact of foreign direct investment on economic growth in Oman: An analysis via SmartPLS approach

Abstract

Foreign Direct Investment (FDI) has grown rapidly around the world. This is because many nations, particularly developing ones, consider Foreign Direct Investment as a vital component of their economic growth plans. This research investigates the relationship between FDI and economic growth in Oman. This is descriptive research that employs quantitative methodologies, with quantitative data gathered through secondary sources. Economic growth is the dependent variable in this study. The factors influencing foreign direct investment are often known as independent variables. In addition, this study used the net inflow and net outflow % of GDP to measure foreign direct investment and GDP growth annual % for measure economic growth. Where the real data was used, annual reports from "The World Bank" for the years 1974 to 2019. In addition, the data in this study was evaluated utilizing a Partial Least Square (PLS) technique and Structural Equation Modeling (SEM). This study discovered a positive association between FDI and economic growth in Oman. Furthermore, the findings suggested that FDI had an impact on economic growth. Foreign direct investment has a substantial impact on economic growth (GDP-Growth). However, the finding showed that FDI-Net-Inflows were insignificant in terms of GDP-Growth.