International Journal of Research in Finance and Management
2021, Vol. 4, Issue 1
Foreign direct investment and domestic investment on the economic growth of the Uzbekistan: A VECM analysis
Kobilov A and Kurbonov O
The present paper deals with the relationship between FDI, GDP, and DI using a vector error-correction model (VECM). The empirical model is based on quarterly data for the period 2010-2019 in Uzbekistan. The Granger causality test indicates a positive significant bidirectional relationship between GDP and GDP Granger causes FDI and a change in the GDP indicate in advance a change in the level of FDI The variance decomposition indicates that fluctuations in FDI are explained by the shocks in GDP (55.0 percent) and Uzbekistan’s domestic investment has a greater impact on growth than FDI.