The Effect of Foreign Direct Investment Inflow on the Economic Growth in Somalia

Abstract

This study explores the impact of foreign direct investment (FDI) on the economic growth of Somalia in between 1998-2019. To estimate the economic growth model, the study applied the autoregressive distributed lag (ARDL) method. Findings from the study showed that the major drivers of economic growth in the long run are inward FDI, labor stock, domestic investment, and exports. In the short run, the growth drivers are the labor force stock, domestic investment and current FDI stock. It was determined that inflation did not have a significant effect on economic growth in Somalia. © 2024, IGI Global. All rights reserved.