The findings and the previous research have shown that FDI in the RE sector is significantly related to the impact of FDI on economic growth in developing countries.
The cointegration results have further exhibited that the relationship between the two variables is positive with respect to particular countries, regions and also the overall performance. Through the use of the data retrieved from Bloomberg New Energy Finance, the World Bank and the Heritage Foundation, we were able to identify the relevant variables which have an influence on the impact of FDI on economic growth.
The extent of this influence was finally calculated through the use of a multiple regression analysis. The respective coefficients for each variable can be found in the appendices. Lastly, a cross-regional comparison of the variables was undertaken with the result that there are intersections across different regions even though these are less than expected.
As stated before, a reason for this might be the limited data which only allowed for 207 observations in 23 countries over a period of 9 years. This is by far the most important research limitation that was faced throughout the research process of this thesis. Other challenges include the definition of the variables which could eventually even be further subcategorized. The question is where to stop and how many variables to include in a multiple regression analysis. Of course one can argue that more variables increase the efficiency of the study, however a higher amount of variables in a regression analysis also might lead to greater problems regarding multicollinearity.
This further leads me to believe that some of the variables which have been omitted due to the fact of multicollinearity could have already been omitted in the first place.
However, the results showed both interesting and surprising findings. Unlike the 2nd hypothesis which considers freedom of business, freedom of government and FDI volatility to be the most important variables, only the latter proved to be correct.
Findings on other country-specific variables such as the freedom from corruption in
Central America or the freedom from government in Asia also promise to be appealing.
As a result, this thesis should also serve as a basis for future research on the topic.
Additional research on the sector would be highly desirable as the industry will continue to steadily grow throughout the next years.
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(1) Africa: Kenya, Morocco, South Africa, Uganda
(2) Asia: China, Indonesia, India, Malaysia, Pakistan, Philippines, Thailand, Turkey, Vietnam (3) Central America: Costa Rica, Mexico, Nicaragua, Panama
(4) South America: Argentina, Brazil, Chile, Peru, Uruguay