Volume 4 • Issue 2 • PP: 34–39 • 2024
Impact of FDI on Sustainable Growth in Belt and Road Economies
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© 2024 The Author(s). Published by ASPG. This article is licensed under the Creative Commons Attribution 4.0 International License (CC BY 4.0).
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This paper investigates the relationship between foreign direct investment and economic growth in Belt and Road countries during 1990–2020. Our findings suggest that a 10% increase in FDI relative to GDP is associated with only a 0.9 percentage-point increase in GDP growth. The results hold after including control variables. The results can be explained by the factors that encourage investors and companies to invest their money in foreign projects, including relatively lower deployment costs, access to resources, a favorable financial environment, and developed financial markets. These elements collectively shape the impact of FDI on economic growth in Belt and Road countries. Future research on the FDI–growth nexus in Belt and Road countries should concentrate on causal links and potential indirect pathways by which FDI can influence economic growth.
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