Does Foreign Direct Investment Promote Economic Growth: An Empirical Analysis
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This paper used time-series data to investigate the causal relation between foreign direct investment and economic growth in two MENA countries, namely Egypt and Jordan. The methodology used in this study follows Toda and Yamamoto (1995) procedure in order to test the Granger causality between economic growth and foreign direct investment. The empirical results reveal that only the FDI-led growth hypothesis exists in the case of both Egypt and Jordan.