Impact of External Determinants on Economic Growth of Selected Arab Countries (2005-2021(
DOI:
https://doi.org/10.31272/jae.i139.1083Keywords:
ARDL models, Johanson panel co-integration, Toda-Yamamoto causality, economic growth, external determinants of economic growthAbstract
In this research, the impact of some external determinants on economic growth in Iraq, Algeria, Egypt and Jordan during the period (2005-2021) were analyzed using the panel data methodology. In this context, foreign direct investment, trade openness, remittances, and external governmental debt were selected as external determinants of GDP growth. The time series stationarity of variables was tested using Levin-Lin-Chu unit root test where it turned out that all variables are integrated of the order one. The results of the long-term relationship estimation showed that all external determinants have significant positive effects on economic growth, the most influential of which is trade openness, then foreign direct investment, then remittances and finally external governmental debt. At most four long-term equilibrium relationships between the variables was proved using the dynamic cointegration tests of Kao and Johansen, and then through the Toda-Yamamoto causality test, a long-term unidirectional relationship from FDI to GDP was found.
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