On the Relationship between Foreign Direct Investment and Energy Consumption: The Mexican Case

• Main Authors: Alí Aali-Bujari, Francisco Venegas-Martínez
• Format: Article
• Language: English
• Published: EconJournals 2021-04-01
• Series: International Journal of Energy Economics and Policy
• Online Access: https://econjournals.com/index.php/ijeep/article/view/10988

<h5>This paper is aimed at analyzing the interrelation between Foreign Direct Investment (FDI) and Energy Consumption (EC) in Mexico during the period 1970-2014. To do that, we carry out a cointegration test and a Granger causality analysis. The empirical results from the cointegration test show a stable link between the growth rates of FDI and EC in the long run. While the results from Granger’s causality show that in the short run there is a unidirectional Granger causality from the growth rate of FDI toward the growth rate EC, while in the medium and long there is a bidirectional causality between the growth rates of FDI and LEC in Mexico during the period under study.</h5><p><strong style="font-size: 0.83em;">Keywords</strong><em style="font-size: 0.83em;">:</em><span style="font-size: 0.83em;"> foreign direct investment, energy consumption, cointegration, Granger causality</span></p><p><strong style="font-size: 0.83em;">JEL Classifications:</strong><span style="font-size: 0.83em;"> C32, F21, Q43.</span></p><p>DOI: <a href="https://doi.org/10.32479/ijeep.10988">https://doi.org/10.32479/ijeep.10988</a></p>