Abstract

ORTIZ, Cristian; SALINAS, Andrea; ALVARADO, Rafael  and  PONCE, Pablo. Foreign direct investment and economic freedom as determinants of Ecuador's economic growth in the short and long term. Revista Economía y Política [online]. 2019, n.29, pp.104-128.  Epub Jan 03, 2019. ISSN 2477-9075.  https://doi.org/10.25097/rep.n29.2019.06.

This research examines the effect of foreign direct investment (FDI) and economic freedom (LE) on economic growth (GDP) in Ecuador. World Bank and Heritage Foundation time series data for the 1980-2017 period are published. Through the ARDL and ECM models, the results of a stable short and long term relationship between the variables. We also find bidirectional causality between the formation of fixed capital and FDI and unidirectional causality from FDI to GDP. One implication of economic policy derived from this research is to maintain a good macroeconomic and legal environment. In addition, not only to attract foreign capital, but also to help the poor achieve the minimum amount of education necessary to achieve productive linkages of FDI in local services.

Keywords : Economic growth; foreign direct investment; economic freedom.

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