The Relationship between Trade and Foreign Direct Investment in G7 Countries a Panel Data Approach
Mihaela Simionescu

In the context of globalization process, the relationship between trade and foreign direct investment has been studied for G7 countries. The Granger causality tests for panel data reflected in period from 2002 to 2013 that there is only short run causality between FDI and exports and FDI and imports. There is unidirectional causal relationship on long run between FDI and trade. Moreover, short run causality in both senses was observed for FDI and trade in G7 countries on the considered horizon.

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