The study investigate the relationship between Foreign Direct Investment and economic growth in Egypt during the period 1981-2014, through a review the
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different economic studies, which investigate the relationship between Foreign Direct Investment and economic growth, the followed by analysis the relationship between Foreign Direct Investment and domestic product at Constant Prices (GDP), and finally estimating the relationship between Foreign Direct Investment and domestic product at Constant Prices. The results indicate that Positive Correlation between Foreign Direct Investment and domestic product during the period 1981-2014. the long-term estimating for the relationship between GDP at constant prices and Foreign Direct Investment, Total Public Expenditure and Inflation rate, that variables are integrated of the same level I(1) based on “Augmented Dickey- Fuller" test for Unit root, there are including cointegration by "Johansen Test".
Also the long term estimating by "Error Correction Model" indicate that each of Foreign Direct Investment, Total Public Expenditure, and Inflation rate has a significant effect on gross domestic product (GDP). And the impact of Foreign Direct Investment on economic growth are relatively weak. And their causality relationship by using “Granger Causality Test “for each of Foreign Direct Investment and Total Public Expenditure toward gross domestic product, and there from GDP towards the of Inflation rate.
Finally, "Thiel" test indicates to high ability of the model of predictability.
Terminology: Gross Domestic Product at constant prices, Foreign Direct Investment, Total Public Expenditure, Inflation rate.