Abstract

This paper uses time-series model to estimate the effects of privatisation and Foreign Direct Investment (FDI) on economic growth in Argentina over the period 1971–2000. Unit root tests and cointegration tests are used to ensure that all variables used are stationary and that there exists a long-run relationship among the variables. An error correction model (ECM) is constructed to estimate both the short- and long-run effects of privatisation and FDI on economic growth in Argentina. The evidence suggest that during 1971–2000, FDI had no effect on either short- or long-run economic growth in Argentina, while privatisation had negative significant effects on economic growth in the long run only.

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