L. N. Sargsyan. Export, Foreign Direct Investment and Gross Domestic Product: Case of the Commonwealth of Independent States Countries and Armenia

UDK 339.564:339.727.24(1-87)

DOI: https://doi.org/10.15507/2413-1407.106.027.201902.206-223

Introduction. Export and foreign direct investment have great significance for economic development of the developing and transition countries, like Armenia and the Commonwealth of Independent States countries. As the domestic market of the Republic of Armenia is small, Armenia’s economic development depends on external demand. The aim of this article is to estimate the impact of foreign direct investment and export on gross domestic product of the Commonwealth of Independent States countries and the Republic of Armenia.

Materials and Methods. For the Commonwealth of Independent States countries, regression analysis with panel data was performed using Stata V10 statistical package. For Armenia, correlation and regression analysis was performed, the results of the Granger causality test were revealed. The regression analysis employed the least squares method.

Results. The performed analysis has shown that in the Commonwealth of Independent States countries the export growth of 1 % causes the gross domestic product growth of 0.92 % and the increase in foreign direct investment of 1 % causes the gross domestic product growth of 0.4 %. In the Republic of Armenia, the export growth of 1 unit causes the gross domestic product growth of 8.89 units and the increase in foreign direct investment of 1 unit causes the gross domestic product growth of 1.23 units.

Discussion and Conclusion. Comparison of the obtained results with those of the similar analysis conducted earlier by the author makes it possible to state that in the Commonwealth of Independent States countries the impact of export has decreased while the impact of foreign direct investment has increased. In Armenia, the impact of both export and foreign direct investment is higher than before. The materials of this article may be useful for other researcher studying this issue, as well as for the governments of the Commonwealth of Independent States countries and the Republic of Armenia responsible for the development of the economic policy.

Keywords: export, foreign direct investment, gross domestic product, export-led growth hypothesis, econometric analysis

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Submitted 28.02.2019; accepted for publication 18.03.2019; published online 28.06.2019.

About the author:

Lilit N. Sargsyan, Research Associate, M. Kotanyan Institute of Economics, National Academy of Sciences of the Republic of Armenia (15 Grigor Lusavorich St., Yerevan 0015, Armenia), Ph. D. (Economics), ORCID: https://orcid.org/0000-0002-5516-7655, sarg.lilit@yahoo.com

Acknowledgments. The author is grateful to the anonymous reviewer, whose comments allowed improve the quality of the text.

For citation:

Sargsyan L.N. Export, Foreign Direct Investment and Gross Domestic Product: Case of the Commonwealth of Independent States Countries and Armenia. Regionology = Russian Journal of Regional Studies. 2019; 27(2):206-223. DOI: https://doi.org/10.15507/2413-1407.106.027.201902.206-223

The author has read and approved the final version of the manuscript.

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