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Abstract
This research paper aims to identify the influence of Foreign Direct Investment on Ecuador’s manufacturing industry. Therefore, the objective of the study is to analyze the causal relationship between the capture of foreign investment and the growth of the manufacturing industry during the period 2010-2021. The methodology used was based on a thorough review of the literature, taking as a reference the article “Does foreign direct investment influence the growth of the manufacturing sector in the Middle East and North Africa region?”. The scope of the study is descriptive as well as explanatory, using unit root tests, a VECM econometric model and the Granger test. The findings show that the industry has gone through periods of rapid growth driven by increased foreign sales, domestic demand and external financial contributions. However, it has also suffered from political, economic and health uncertainties (COVID-19). Econometric analysis allows us to conclude that there is a positive and substantial impact of foreign direct investment (FDI) on the growth of manufacturing industry, both in the long term and in the short term.
References
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