The impact of macroeconomic variables towards economic growth : Evidence from developing countries and developed countries / Mohd Hisyam Sazlyuddin Mohd Sazali

The emphasis of the study is to investigate the impact of macroeconomic variables
such as inflation, foreign direct investment, trade and unemployment towards gross
domestic product of selected developing and developed countries for 10 year gap
period from 2007 until 2016. The main objective of this study is to identify how these
macroeconomic variables react with GDP and panel data approach are used in this
study. It is expected that, foreign direct investment (FDI) and trade has a positive
relationship with economic growth while inflation and unemployment have a negative
relationship with economic growth. Random effect model is adopted in developing
countries while developed countries and overall are using fixed effect models. For
developed countries, foreign direct investment and inflation are not significant on
economic growth while trade are positive significant and unemployment are negative
significant on economic growth. For developing countries and overall, inflation and
unemployment has a negative significant effect on economic growth while direct
foreign investment and trade has a positive significant effect on economic growth.