Does the Foreign Direct Investment crowd in or crowd out capital formation?: case of developing countries / Rita Suzi Dommin

This study aimed to investigate whether foreign direct investment (FDI) crowd in or crowd out on domestic investment (DI) in the developing countries over the period of 2008 to 2015. The data of FDI net inflow used for FDI and gross capital formation used for domestic investment (DI), therefore both variable will be analyse through panel data analysis. Apart from that, the data of real exchange rate, inflation and gross domestic product used as a control variables in the panel analysis. After several statistical tests have been conducted, the results show quite an interesting finding along with some of the previous study whereby the analysis shows the existence of relationship between foreign direct investment (FDI) and domestic investment (DI) hence its proved the crowding in effect of domestic investment(DI) by the foreign direct investment (FDI).