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Title: Foreign Direct Investment, Public Debt and Economic Growth in Developing Countries
Authors: Thi Bich Thuy Dao and Thi Hue Le
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Thi Bich Thuy Dao1 and Thi Hue Le2,* 1. VNU University of Economics and Business, Vietnam National University, Hanoi 100000, Vietnam. 2.VNU University of Economics and Business, Vietnam *. Corresponding Author
MLA 8 Dao, Thi Bich Thuy, and Thi Hue Le. "Foreign Direct Investment, Public Debt and Economic Growth in Developing Countries." Int. j. of Social Science and Economic Research, vol. 9, no. 8, Aug. 2024, pp. 2875-2891, doi.org/10.46609/IJSSER.2024.v09i08.021. Accessed Aug. 2024. APA 6 Dao, T., & Le, T. (2024, August). Foreign Direct Investment, Public Debt and Economic Growth in Developing Countries. Int. j. of Social Science and Economic Research, 9(8), 2875-2891. Retrieved from https://doi.org/10.46609/IJSSER.2024.v09i08.021 Chicago Dao, Thi Bich Thuy, and Thi Hue Le. "Foreign Direct Investment, Public Debt and Economic Growth in Developing Countries." Int. j. of Social Science and Economic Research 9, no. 8 (August 2024), 2875-2891. Accessed August, 2024. https://doi.org/10.46609/IJSSER.2024.v09i08.021.
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ABSTRACT: This study focuses on the FDI-public debt-economic growth nexus in developing countries. Twostep system generalized method of moments (GMM) estimation is applied in dynamic panel data models using a dataset covering 67 developing countries in the period from 2000 to 2019. The findings reveal that FDI is a growth stimulus factor and the growth effect of public debt is nonlinear. While FDI enhances the positive growth effect of public debt, public debt impedes FDI-induced growth. In country groups by region, public debt has a largest negative impact on the growth effect of FDI in African, while in Asian and Latin American countries, this impact is less. In country groups by income level, the impact of public debt on FDI growth effect is negative in middle income countries and none in high income countries. FDI extends the range of positive growth effect of public debt in middle income countries while it reduces the negative growth effect of public debt in high income countries.

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