The causal direction of the relationship between foreign

The gap

Evidence profile

Stated in the limitations and recommendations and cells research gap sections of the source papers, classified as general, spanning 3 journals.

Supporting evidence — 3 representative gaps

• A Quantitative Study of FDI Impact on India's Economic Growth (From 2014-15 To 2025-26) (2026) · Zenodo (CERN European Organization for Nuclear Research) · doi

  interpreting The study has several limitations that must be considered while the findings. It relies only on secondary data from official sources, which may be subject to revisions or reporting delays. The study period (2014–15 to 2025–26) is relatively short to capture long-term trends. Additionally, the study focuses on quantitative analysis and does not include qualitative factors such as policy changes, political conditions, and global economic shocks affecting GDP. LITERATURE REVIEWS 1. Theodore H. Moran (2003) researched FDI and Development: Role of International Rules and Regulations. The objective was to examine global policies influencing FDI and protect host countries’ interests. The methodology included descriptive and comparative analysis. Findings showed that long- term economic development, while short-term investments provide limited benefits. positively supports FDI and 2. R. Anitha (2012) examined Foreign Direct Investment and Economic Growth in India. The objective was to identify issues affecting FDI inflows improvements. The methodology involved analysis of secondary data that from official reports. Findings economic reforms and globalization significantly increased FDI inflows and strengthened India’s economic performance. indicated suggest 3. Mahanta Devajit (2012) analyzed the impact of Foreign Direct Investment on the Indian Economy. The objectives included evaluating FDI’s effect on domestic investment and human capital formation. The study relied on secondary data analysis. Findings revealed that the impact of FDI depends on investor motives, sector characteristics, and government policies. 4. Sarba Priya Ray (2012) examined the Impact of Foreign Direct Investment on Economic Growth in India: A Cointegration Analysis. The objective was to study the long-run and short-run relationship between FDI and GDP. The study applied and Error Correction Model cointegration techniques, and results confirmed a significant long- term equilibrium relationship between FDI inflows and economic growth. 5. Gulshan Akhtar (2013) examined Inflows of FDI in India: Pre and Post Reform Period. The objective was to analyze the sector-wise distribution of FDI across industries such as services, construction, and telecommunications. The study used secondary data from sources including the Reserve Bank of India and the Department of Industrial Policy and Promotion. The findings indicated that India has emerged as one of the fastest-growing economies and a major global investment destination. 6. R. B. Teli (2013) analyzed A Critical Analysis of FDI Inflows in India. The objectives were to study growth patterns and the impact of FDI on economic indicators. The methodology relied on secondary data from international and national reports. Findings revealed that FDI growth positively influenced GDP, employment generation, and foreign exchange reserves. 7. Angad Singh Maravi (2016) studied Foreign Direct Investment (FDI) in India: A Key for Economic Growth in India. The objective was to assess the impact and recent trends of FDI in India. The study used a descriptive approach based on secondary data. Findings that FDI to economic growth significantly contributes through improved management practices. technology, showed capital, and 8. Jyoti Gupta and Dr. Rachna Chaturvedi (2017) conducted a study titled A Study to Analyze FDI Inflow to India. The objective was to examine trends and forecast future FDI inflows. The methodology involved long-term trend analysis using secondary data. Findings showed that FDI plays an important role in bridging the gap between savings and investment in India. 9. N. Prasanna (2017) studied Impact of Foreign Direct Investment on Export Performance in India. The objective was to assess the relationship between FDI and manufactured exports. The methodology used economic data analysis of GDP and export variables. Findings confirmed that FDI has a significant positive effect on India’s export performance.

  generalstated in limitationsevidence 5/5
  Keywords: india economic investment secondary objective growth foreign inflows impact long term methodology direct short trends
• Foreign direct investment inflows and unemployment dynamics in Africa (2026) · Future Business Journal · doi

  The policy recommendations should reflect that FDI is beneficial but not sufficient on its own. The evidence sug- gests that the labor-market gains from FDI are strong- est when they are supported by domestic investment, economic growth, and trade openness. This means that policy should be coordinated rather than isolated, with investment promotion linked to a broader development strategy. First, African governments should continue to attract FDI, but they should prioritize sectors with strong employment multipliers. Labor-intensive and value- adding sectors are more likely to generate jobs for both skilled and semi-skilled workers, especially for young people entering the labor market. Incentives should therefore favor investments that create local linkages, support supply chains, and expand domestic participa- tion rather than projects that are highly enclave-oriented or excessively capital-intensive. Second, domestic investment should be strengthened alongside the attraction of foreign capital. Because the results show that local investment also lowers unem- ployment, governments should improve access to credit, reduce the cost of doing business, and support small and medium-sized enterprises. Public infrastructure, indus- trial support policies, and stable macroeconomic condi- tions can help domestic firms expand employment and better complement FDI inflows. Third, trade openness should be deepened in a way that supports productive employment. Since openness is consistently associated with lower total and youth unemployment, governments should reduce unnecessary trade barriers, improve logistics, and strengthen export competitiveness. However, openness should be paired with industrial and skills policies so that local firms and workers can compete effectively in more integrated markets. Fourth, economic growth should be treated as a core employment policy rather than a separate macroeco- nomic objective. The interaction results show that FDI creates more employment where growth is stronger, so governments should pursue policies that raise produc- tivity, improve infrastructure, and enhance institutional quality. Better governance, lower transaction costs, and more reliable institutions can improve absorptive capac- ity and increase the employment payoff from investment. Finally, future FDI strategy should focus more carefully on sectoral composition and skills alignment. Policymak- ers need to identify which industries create the most jobs for young people and design training systems that pre- pare workers for those opportunities. This is especially important because a mismatch between investor demand and local labor skills can weaken the employment effect of otherwise beneficial foreign investment.

  generalstated in recommendationsevidence 5/5
  Keywords: employment investment labor domestic openness governments local improve policy growth trade rather workers support policies
• THE INFLUENCE OF FINANCIAL DEVELOPMENT AND FDI INFLOWS ON ECONOMIC GROWTH: EMPIRICAL EVIDENCE FROM GCC COUNTRIES USING PMG-ARDL APPROACH (2026) · Economics · doi

  The causal direction of the relationship between foreign direct investment, financial development, economic growth, and other macroeconomic variables has been a controversial issue in the economic literature. - The debate centers around the question whether FDI or FD can be the leading force in the economy or whether they follow the economic growth of the country.

  generalstated in cells research gapevidence 5/5
  Keywords: causal direction relationship between foreign direct investment financial

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