Causal Nexus between Economic Complexity and FDI: Empirical Evidence from Time Series Analysis

Khan H., Khan U., Khan M. A.

CHINESE ECONOMY, cilt.53, sa.5, ss.374-394, 2020 (ESCI İndekslerine Giren Dergi) identifier identifier

  • Yayın Türü: Makale / Tam Makale
  • Cilt numarası: 53 Konu: 5
  • Basım Tarihi: 2020
  • Doi Numarası: 10.1080/10971475.2020.1730554
  • Sayfa Sayıları: ss.374-394


The rapid economic emergence of China is credited to be its products and economic complexity. Foreign direct investment, with its better-embedded knowhow and technology, is one of the main drivers for the higher economic complexity of China. By applying the ARDL and VECM approaches; this study confirms the long-run bidirectional and short-run unidirectional causal relationship between economic complexity and foreign direct investment. Besides, we include additional control variables such as institutional quality, information & communication technology, trade openness, per capita GDP, domestic investment, and human capital, which are found robust in our analysis.