The Research on the Impact of Foreign Direct Investment on Economic Growth in Somalia
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Abstract
The purpose of this paper aim to examine the impact of foreign direct investment on economic growth of Somalia. The study utilizes time series data over the period of 2000-2018. The Data was collected from the World Bank and SESRIC organization. Organization of Islamic countries forum, especially statistical, economic and social research. To evidence the relationship between the Gross Domestic Product (GDP) of Somalia and Foreign Direct Investment (FDI), Inflation Rate (INF) and Domestic Investment (DI). This research used the augmented Dickey–Fuller [ADF], Philips– Perron [PP] to test for stationarity of the variables and Ordinary Least Square model was examined among dependent variable and independent variable. The result reveals that FDI has a positive and significant effect on Somalia economic growth. Also the result shows that inflation has negative relationship and significant impact on Somalia economic growth. While Gross Domestic Investment has a positive relationship and significant effect on Somalia economic growth.Therefore, the study recommends there is a need for the government must retain right monetary and fiscal policies and train the Somali employee in order to attract in the Somalia economy.
Keywords
Foreign Direct Investment,Economic Growth, Somalia
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