Relationship between Foreign Direct Investment and Economic Growth in Peru: A Quantitative Approach (#1405)

Authors

Chavez Alvarado, Esthefany Jhaneli

Rodríguez Abraham, Antonio Rafael

Abstract

This study analyses the long-run relationship between foreign direct investment (FDI) and economic growth in Peru over the period 1980–2023, adopting a quantitative and non-experimental approach based on time-series analysis. The empirical strategy relies on the Engle–Granger cointegration framework to assess whether foreign capital inflows and gross domestic product (GDP) exhibit a stable equilibrium relationship over time. The results provide evidence of a positive and statistically significant long-run association, indicating that FDI and GDP tend to co-move along a common trajectory despite short-run fluctuations. From a systemic perspective, these findings highlight the role of foreign investment as a structural component of economic dynamics rather than a short-term stimulus. The study contributes to the discussion on sustainable growth and long-term planning by offering empirical insights that are relevant for policy design, institutional coordination, and strategic decision-making in emerging economies, particularly in contexts where economic performance depends on external capital flows and long-run stability.