The Role of Education in the Interaction between Foreign Direct Investment and Economic Growth; A Structural cointegrating Vector Autoregressive (SCVAR) Approach

Document Type : Research Paper

Authors

1 Assistant Professor, Economics, Khatam University

2 MA, Economics, Khatam University

Abstract

With the development of various theories and models in relation to economic growth over time, many researchers studied its effect on the growth and factors affecting its creation and absorption.
This article examines the role of education in the interaction between foreign direct investment and economic growth during the  post-war period  (1990--2014). To this end, a structural cointegrating vector autoregressive model has been used where the dollar earning of oil exports is considered as aweak exogenous variable. The results indicate the existence of a long-term relationship between foreign direct investment and economic growth and positive role of education in the interaction between foreign direct investment and economic growth. The Likelihood Ratio test results show that the applied constraints are appropriate and the results of a series of tests, such as the q test to detect autocorrelation, autocorrelation test of maximum likelihood (LM), and normality test, indicate the goodness of fit of the model.

Keywords


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