EXPLORING THE EFFECTS OF INTERNATIONAL FINANCIAL LINKAGES ON ECONOMIC STABILITY AND EXPANSION
Thomas Kumar
Commerce
May 2024
Expansion and economic development are habitually used to depict financial or cost stability as well as economic stability. Like previous hypothetical and observational studies, this one investigates how FDI affects the host country's economic development. The PMG/ARDL model has received little attention in previous experimental research, despite its practical benefit in analyzing the short- and long-term effects of FDI. Here we take a look at how FDI has impacted the GDP growth of nations in Sub-Saharan Africa. Panel data from 10 countries in Sub-Saharan Africa were analyzed from 2000 to 2020. Utilizing the PMG/ARDL model, the impact of FDI on economic development was examined both in the short and long term. We used the panel unit root test and panel cointegration test to enhance the model's evaluation. The results demonstrate that FDI has a positive and substantial influence in the long run, even though it is quantitatively insignificant in the near term. Foreign direct investment fosters supported economic development, according to the study’s findings. Therefore, Sub-Saharan African countries should prioritize attracting FDI
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