The Role of Foreign Direct Investment on Economic Growth: Evidence from Comoros

This study examined the relationship between Foreign Direct Investment (FDI) and economic growth in Comoros from 1981 to 2022.While some prior research finds a positive impact of FDI on growth, other studies report negligible effects or ambiguity in the relationship.The current analysis employed the autoregressive distributed lag bounds testing approach after confirming stationarity and cointegration.The results of the analysis indicated a long-run relationship among variables influencing growth based on the bounds test.However, individual variables did not significantly impact growth in the level's equation.This suggests policymakers should explore additional determinants or economic indicators beyond those analyzed in this study, such as structural changes, to more meaningfully influence domestic production in Comoros.Further examination of other growth drivers could provide insights to optimize foreign capital inflows.