Foreign direct investment and Economic growth in Mauritania

Abstract

This article examines the causal link between foreign direct investment and economic growth in Mauritania during the period 1973-2019 using the ARDL (Autoregressive Distributed Lag model) method developed by Pesaran and Shin in 1998. The stationarity tests have put in highlights a cointegration of order 1 for the growth rate, the schooling rate, the trade openness rate, and the money supply. The empirical results of this study have shown that foreign direct investment, the exchange rate, and education rate have negatively significant effects on economic growth. On the other hand, the development of the financial system and trade openness have a significantly positive effect. As for domestic investment and inflation, they exert negative but statically insignificant effects.