Impact of Foreign Direct Investment (FDI), On The Economic Growth of Ecuador: A Systematic Review.

Abstract

The analysis of the relationship between foreign investments and Ecuador's economic growth over the past years has demonstrated a productive dependence for the country's economic and social development; this is due to the impact of foreign direct investment (FDI) on the balance of payments. However, the lack of government stimulation for foreign investors (tax benefits) and state control over monetary resources (capital flight) have generated financial instability, lacking commercial opportunities. The objective of this work is to conduct a systematic review that theoretically grounds topics related to the impact of FDI on economic growth through consulted publications that respond to the last five years. For this, a systematic review was conducted using the PRISMA method in scientific databases of impact such as Scielo and Web Of Science. After reviewing the literature on foreign direct investment (FDI) and its incidence on economic growth during the period of 2010-2022, quantitative data obtained from the Central Bank of Ecuador (BCE) will be used. In this analysis, it will be determined whether the behavior of the factors is relatively positive or negative using the Vector Autoregressive (VAR) - Vector Error Correction (VECM) model. Once the analysis is complete, it was concluded that studies using this methodology help formulate economic policies aimed at promoting sustainable and equitable growth in Ecuador, leveraging the potential of foreign investment and commercial opening