Standard Gravity Inversion Modeling FDI per Capita GDP in the Ethiopian Economy Environment from 1998-2017
Ali Gaboussa1, Wafa Ramdani1, Hayat Otmani1, Salim Keffane2*
1Economic and Commercial Sciences and Management Sciences in El-oued, Algeria
2University Setif, Algeria
Citation: Gaboussa A, Ramdani W, Otmani H, Keffane S (2020) Standard Gravity Inversion Modeling FDI per Capita GDP in the Ethiopian Economy Environment from 1998-2017. SciTech Management Sciences 2020. Thailand
Received: March 18, 2020 Accepted: March 20, 2020 Published: March 20, 2020
The reality of FDI in the Ethiopian economy environment as well as the standard and analytical modeling of the reflection of this type of investment on the economic growth during the period (1998-2017) based on the hypothesis that the policy of attracting foreign investments in the Ethiopian economy has a positive effect in general and per capita GDP in particular. The analytical and standard study concluded with a number of results, including (1) The Ethiopian economy's qualitative leap coincided with the entry of foreign direct investment into Ethiopia until Ethiopia reached Africa's fastest growing economy in return for the second most attractive country for foreign investment in the world after Angola in 2016. (2) The strength of Foreign Direct Investment (FDI) has been reflected in the size of the GDP, but it has not been reflected in the level required for the welfare of the Ethiopian individual. (3) The standard study indicates that there is a direct correlation between FDI and GDP per capita, meaning that any increase in the volume of FDI in the Ethiopian economy will lead to an increase in per capita GDP.
Key words: Foreign Direct Investment, Economic growth, Ethiopian economy