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The Causality between Capital Formation and Economic Growth in MENA Region
[journal article]
Abstract This paper investigates the causal relationship between gross domestic investment (INV) and GDP for Middle East and North Africa (MENA) region countries by using panel unit root tests and panel cointegration analysis for the period 1970-2010. The results show a strong causality from economic growth ... view more
This paper investigates the causal relationship between gross domestic investment (INV) and GDP for Middle East and North Africa (MENA) region countries by using panel unit root tests and panel cointegration analysis for the period 1970-2010. The results show a strong causality from economic growth to investment in these countries. Yet, investment does not have any significant effects on GDP in short- and long-run. It means that it is the GDP that drives investment in mentioned countries, not vice versa. So the findings of this paper support the point of view that it is higher economic growth that leads to higher investment. According to the results, decision makings should be employed to achieve sustainable growth through higher productivity and substantially enlarging the economic base diversification in the future... view less
Keywords
Middle East; North Africa; economic growth; gross domestic product; investment; productivity
Classification
National Economy
Free Keywords
Granger Causality; Gross Domestic Investment (INV); MENA Region Countries; Panel Cointegration; Panel Unit Root
Document language
English
Publication Year
2013
Page/Pages
p. 1-7
Journal
International Letters of Social and Humanistic Sciences (2013) 8
ISSN
2300-2697
Status
Published Version; peer reviewed