The Positive Impact of FDI Reflected on the Economic Growth of G7 Countries: Empirical Evidence based on Panel Data

This study is investigating the positive impact of foreign direct investment on economic growth in the case of the world’s advanced economies, G7 countries, between 2000-2023. The analysis highlights the benefits of FDI on economic growth, using the Panel EGLS (Cross-section random effects) regression method. Empirical results showed that FDI could generate up to a 15% increase in economic growth along with its positive movement in G7 economies, this being an element of novelty in the literature by analyzing the FDI’s impact from the perspective of advanced countries. Also, the results showed that renewable energy consumption and research and development expenditure bring a positive influence on the economic growth of the host countries. This research should be considered as part of the decision-making process worldwide, encouraging both developed and developing countries in attracting foreign direct investments for technological and innovation evolution. Moreover, renewable energy consumption and research and development expenditure represent key drivers in innovation, green growth and technological transfer, stimulating investments and accelerating the economic growth.