Foreign Direct Investment and Economic Growth in Guyana
The Role of Financial Sector Development
Bibliographic Data
| ID | 10429949 |
|---|---|
| Authors | Regan Deonanan (0000-0001-6754-9119, Department of Economics, Faculty of Social Sciences, The University of the West Indies, St. Augustine, Trinidad & Tobago, corresponding author), Daren A Conrad (0000-0002-8820-4619, University of the West Indies), Daren Conrad (Department of Economics, Faculty of Social Sciences, The University of the West Indies, St. Augustine, Trinidad & Tobago) |
| Year | 2022 |
| Volume | 49 |
| Issue | 3 |
| Pages | 309-326 |
| Publication date | 2022-04-21 |
| Open Access | Yes |
| Type | ARTICLE |
| Venue | The Review of Black Political Economy (JOURNAL) |
| Journal identifiers | ISSN: 0034-6446 • E-ISSN: 1936-4814 |
| Publisher | SAGE Publishing (PUBLISHER • US) |
| DOI | 10.1177/00346446221094866 |
| OpenAlex | W4224280737 |
| Language | EN |
| References cited | 23 |
This paper empirically examines how financial sector development affects the FDI-economic growth nexus in Guyana. The novelty is that we examine the relationship in a poor, Small Island Developing State (SIDS) with an underdeveloped financial sector, and where the bulk of FDI flows to the extractive sector. Using annual data from 1981 to 2014, and, both a VECM and ARDL framework that distinguishes among long-run and short-run causal impacts, we provide new insights on why FDI may have a smaller impact on economic growth in SIDS or resource-rich countries. Specifically, we find that FDI dampens long-run growth in Guyana, which is consistent with the extractive literature, but through interaction with the financial sector, FDI has a positive offsetting effect at all levels of financial development in the period under study. While our findings have several nuanced policy implications on how to maximize the developmental potential of FDI in Guyana, they may be relevant to other SIDS or resource-rich countries
Developing country · Development economics · Economic growth · Economics · Financial sector · Financial sector development · Foreign direct investment · International economics · Macroeconomics · Monetary economics · Nexus (standard · Short run · Economic Growth and Development · Finance · International Business and FDI · Natural Resources and Economic Development
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| Highly cited | No |
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