Document Type : Original Article
Authors
1
PhD Student, Department of Economics, Faculty of Aras International Campus, University of Tabriz, Tabriz, Iran
2
Associate Professor, Department of Economics, University of Tabriz, Tabriz, Iran
3
Professor, Department of Economics, Faculty of Economics and Management, University of Tabriz, Tabriz, Iran
Abstract
This study investigates the impact of public debt and foreign direct investment (FDI) on the economic growth of four selected Islamic countries (Iran, Turkey, Malaysia, Egypt) during the period 1960-2023. To achieve the research objectives, the panel autoregressive distributed lag (Panel ARDL) econometric method was employed to simultaneously analyze the short-term and long-term relationships among the variables. In the empirical model, in addition to the key research variables (public debt and FDI), the role of control variables including national savings, inflation rate, real exchange rate, human capital, political stability, and the degree of trade openness was also considered. Findings from the model estimation indicate that in the long run, both public debt and inward FDI have a positive and significant effect on the economic growth of the studied countries. Furthermore, the results show a positive and significant effect of inflation and domestic savings, and a negative effect of the degree of trade openness on economic growth. In the short term, the error correction coefficient was negative and significant, indicating the stability of the model and its convergence towards long-term equilibrium. Based on these findings, efficient and productive management of public debt, improving the business environment and macroeconomic stability to effectively attract foreign investment, along with policies supporting national savings and managed trade openness, are presented as the main policy recommendations of this research.
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