Analysis of the links among FDI, GDP, oil and gas prices in developed, developing and resource-dependent countries

Abstract

This thesis studies the possible causal relationships among foreign direct investment (FDI), oil and gas prices, and gross domestic product (GDP) growth in 3 different groups of countries for the period of 1971-2021. Many unsuccessful countries in the world cannot efficiently attract their resources for economic growth. Sometimes resource-rich countries cannot maximize the benefits of the trade of natural sources. For example, many oil-dependent countries still fail to diversify their economy, and state incomes fluctuate as oil prices change. Moreover, in this thesis, some developed and successful developing countries are studied in order to compare their experience with resource-dependent countries. The effects of oil/gas prices on GDP and FDI, also the relationship between GDP and FDI are studied in selected 5 resourcedependent countries, 5 developed countries, and 5 developing countries using the Granger causality test and vector autoregressive (VAR) model. In general, this thesis asserts that an increase in commodity prices can negatively affect resource-dependent countries.