IMPACT OF FOREIGN DIRECT INVESTMENT ON THE BRICS ECONOMY

Abstract

            Foreign Direct Investment has an important role in the BRICS economy. FDI is a significant factor contributing to the economic growth and development in the developing countries. Generally many of the researchers have positive impact of FDI on economic growth in the developing economy and most of the growth theory promote that FDI helps for the growth especially of developing countries. This study has tried to analyse the impact of FDI on the BRICS economy. The main objectives of the study are growth and trend pattern of FDI in the BRICS countries and the share of FDI in the other regions. The study has positive impact on economic growth in the BRICS economy. For this study data used for the period from 1991 to 2018 and the periods divided into three sub periods 1991 to 2000, 2001 to 2010 and 2011 to 2018. The variable was measured in millions of US dollar. The study variables are Foreign Direct Investment and Gross Domestic Product and the data are collected from World Investment Report published by UNCTAD and World Development Indicator, World Bank. To analyse the data, index numbers, annual growth rate, averages and percentages have been used. To know the Panel unit root test, Panel co-integration and Vector Error Correction model have been used. The estimated regression coefficients are tested for their significance using t-test.