Research Project

Research Questions

1. What is the relationship between FDI inflows and GDP?
2. What is the relationship between FDI outflows and GDP?

Data Sets

The project uses the Data Science Labs version of gapminder, with the following additional data sets from Gapminder.org:

1. Foreign investment inflows (direct)
2. Foreign investment outflows (direct)

All data sets are available from Gapminder.org under a CC-BY 4.0 license.

Principal investigator

This project, Foreign Direct Investment, was submitted on 21 June 2021 by Bonnie, ID: 023, in partial fulfillment of the requirements for ENG 3208A: Telling stories with Data, Shantou University, Spring Semester 2021.

Research Project

Research Questions

1. What is the relationship between FDI inflows and GDP?
2. What is the relationship between FDI outflows and GDP?

Data Sets

The project uses the Data Science Labs version of gapminder, with the following additional data sets from Gapminder.org:

1. Foreign investment inflows (direct)
2. Foreign investment outflows (direct)

All data sets are available from Gapminder.org under a CC-BY 4.0 license.

Principal investigator

This project, Foreign Direct Investment, was submitted on 21 June 2021 by Bonnie, ID: 023, in partial fulfillment of the requirements for ENG 3208A: Telling stories with Data, Shantou University, Spring Semester 2021.

Analysis

In the following, GDP data in 2000s are analyzed with inflows and outflows respectively. Here is the GDP data introduction.

The first table roughly shows each country’s GDP in the 2000s. The top ten countries that had high average GDP were the US, Japan, Germany, China, the UK, France, Italy, Canada, Brazil and Spain. These countries’ GDP was also high in 2011, revealed in the GDP map; and they remain higher today, as well.

Japan, the US, France and India are chosen to verify the correlation result of China as they are all the big economic entities and it is clear to see the relation between FDI and GDP. GDP of all of these five countries kept increasing from 1980 to 2011.

Analysis

Here are two models describing the relationship between inflows and outflows of FDI and GDP respectively.

In the first model, the R square is about 0.94, which has a good fitting effect. Overall, the p value is 0, revealing the significant relationship between inflow and GDP. In terms of France and India, the inflows have a negative relationship with GDP reflected by the negative statistic numbers, while France’s p value is higher than others and its inflows are not that significant. On the contrary, Japan and the US maintain a positive relationship with GDP.

In the second model, the R square is also about 0.94 with a good fitting effect. The p value is 0, indicating the significant relationship between outflow and GDP. India’s outflows have a negative relationship with GDP reflected by the negative statistic numbers. Besides, France’s outflows still show the least significance compared with others. On the contrary, Japan and the US maintain a positive relationship with GDP.

The previous China’s FDI reveals the positive significant relationship with GDP. However, in terms of Japan, although it has high GDP, its FDI is relatively low, which might mean that it mainly depends on its own capital. As for France and India, they both has similar GDP and low inflows, while France has high outflows and India has low inflows. It shows that India and France might be not the preferred choices for foreign investment; but since their GDP stay high, their production might mostly depend on their domestic capital.

Therefore, as for the relationship between inflows and outflows of FDI and GDP, it is usually influenced by other factors and cannot be easily judged by one single variable.