# Foreign Direct Investment and Exports Stimulate Economic Growth? Evidence of Equilibrium Relationship in Peru

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## Abstract

**:**

## 1. Introduction

#### 1.1. Foreign Direct Investment and Economic Growth

#### 1.2. Foreign Direct Investment and Economic Growth in Peru

#### 1.3. Foreign Direct Investment, Exports, and Economic Growth

#### 1.4. Theoretical Model

## 2. Materials and Methods

#### 2.1. Materials

#### 2.2. Variables and Data

#### 2.3. Methodology

## 3. Results

#### 3.1. Unit Root Tests

#### 3.2. Granger Causality

#### 3.3. ARDL Cointegration

## 4. Discussion

## 5. Conclusions

## Author Contributions

## Funding

## Institutional Review Board Statement

## Informed Consent Statement

## Data Availability Statement

## Conflicts of Interest

## References

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**Figure 1.**Export, Foreign Direct Investment and GDP growth rate, 1970–2020, Peru. Prepared by the authors.

Period | Real GDP (Constant 2015 Prices, 10 ^{9} USD) | Exports (% of GDP) | FDI Net Inflows (% of GDP) |
---|---|---|---|

1970–1979 | 55.942 | 15.74 | 0.37 |

1980–1989 | 68.259 | 18.81 | 0.14 |

1990–1999 | 72.563 | 13.51 | 3.10 |

2000–2009 | 109.151 | 23.76 | 3.61 |

2010–2020 | 186.300 | 24.84 | 3.84 |

${\mathit{Y}}_{\mathit{t}}$ | ${\mathit{X}}_{\mathit{t}}$ | $\mathit{F}\mathit{D}{\mathit{I}}_{\mathit{t}}$ | |
---|---|---|---|

${Y}_{t}$ | 1.00000 | 0.17984 | 0.41516 |

${X}_{t}$ | 0.17984 | 1.00000 | 0.39608 |

$FD{I}_{t}$ | 0.41516 | 0.39608 | 1.00000 |

Series | Auxiliary Model | Criteria * | Lag | $\mathit{\tau}$-Statistic | Probability | Integration ** |
---|---|---|---|---|---|---|

${Y}_{t}$ | None | SIC | 0 | −3.41486 | 0.00100 | $I\left(0\right)$ |

${X}_{t}$ | None | SIC | 0 | −0.30153 | 0.57210 | $I\left(1\right)$ |

$\Delta {X}_{t}$ | None | SIC | 0 | −6.31486 | 0.00000 | $I\left(0\right)$ |

$FD{I}_{t}$ | None | SIC | 0 | −1.54138 | 0.11460 | $I\left(1\right)$ |

$\Delta FD{I}_{t}$ | None | SIC | 0 | −8.86946 | 0.00000 | $I\left(0\right)$ |

Causality * | Criteria | Lag | $\mathit{F}$-Statistics | p-Value |
---|---|---|---|---|

$\Delta FD{I}_{t}\to {Y}_{t}$ | SIC ** | 2 | 3.69140 | 0.03360 |

$\Delta {X}_{t}\to {Y}_{t}$ | SIC ** | 2 | 4.74714 | 0.01370 |

${Y}_{t}\to \Delta {X}_{t}$ | SIC ** | 3 | 3.52119 | 0.02350 |

Variables | Coefficients |
---|---|

Constant | 0.38236 |

Error correction term | −1.72142 * |

$\Delta {Y}_{t-1}$ | 0.91856 * |

$\Delta {Y}_{t-2}$ | 0.46843 * |

$\Delta {Y}_{t-3}$ | 0.36176 * |

$\Delta {X}_{t}$ | −0.04461 |

$\Delta FD{I}_{t}$ | 1.44480 * |

$\Delta FD{I}_{t-1}$ | −0.77884 |

$\Delta FD{I}_{t-2}$ | −0.88720 * |

Regressand variable | $\Delta {Y}_{t}$ |

Observations | 47 |

Number of coefficients ** | 9 |

${R}^{2}$-adjusted | 0.55437 |

$\mathrm{Probability}\text{}F$-statistic | 0.00000 |

$\mathrm{Durbin}\text{\u2013}\mathrm{Watson}\text{}d$-statistic | 1.84239 |

$\mathrm{Breusch}\text{\u2013}\mathrm{Godfrey}\text{}\mathrm{Prob}.\text{}LM$-statistic *** | 0.85420 |

$\mathrm{Breusch}\text{\u2013}\mathrm{Pagan}\text{\u2013}\mathrm{Godfrey}\text{}\mathrm{Prob}.\text{}LM$-statistic | 0.29168 |

$\mathrm{White}\text{}\mathrm{non}\text{-}\mathrm{cross}\text{}\mathrm{terms}\text{}\mathrm{Prob}.\text{}LM$-statistic | 0.77760 |

$\mathrm{Harvey}\text{}\mathrm{Prob}.\text{}LM$-statistic | 0.08332 |

$\mathrm{Glejser}\text{}\mathrm{Prob}.\text{}LM$-statistic | 0.09135 |

$\mathrm{Jarque}\text{\u2013}\mathrm{Bera}\text{}\mathrm{Prob}.\text{}JB$-statistic | 0.44784 |

$\mathrm{Dickey}\text{\u2013}\mathrm{Fuller}\text{}\mathrm{Prob}.\text{}\tau $-statistic **** | 0.00000 |

$\mathrm{Cointegration}\text{}\mathrm{bound}\text{}\mathrm{test}\text{}F$-statistic ***** | 8.11543 |

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**MDPI and ACS Style**

Bazán Navarro, C.E.; Álvarez-Quiroz, V.J.
Foreign Direct Investment and Exports Stimulate Economic Growth? Evidence of Equilibrium Relationship in Peru. *Economies* **2022**, *10*, 234.
https://doi.org/10.3390/economies10100234

**AMA Style**

Bazán Navarro CE, Álvarez-Quiroz VJ.
Foreign Direct Investment and Exports Stimulate Economic Growth? Evidence of Equilibrium Relationship in Peru. *Economies*. 2022; 10(10):234.
https://doi.org/10.3390/economies10100234

**Chicago/Turabian Style**

Bazán Navarro, Ciro Eduardo, and Víctor Josué Álvarez-Quiroz.
2022. "Foreign Direct Investment and Exports Stimulate Economic Growth? Evidence of Equilibrium Relationship in Peru" *Economies* 10, no. 10: 234.
https://doi.org/10.3390/economies10100234