The Role of the Economic Size of a Country in Attracting Foreign Direct Investments: A Panel Data Analysis for OECD Countries (1980-2006)

The long-run relationship between foreign direct investment and economic growth was examined for 21 OECD member countries using panel data estimations (models) based on annual data for the period 1980–2006. During the analysis process, which started with panel unit root tests, it was observed that the variables of foreign direct investment and economic growth had unit roots. In the next stage, cointegration was found between the variables. The existence of a significant relationship was determined between foreign direct investment and economic growth based on the estim ated regression model.