The Effect of Multinational Corporations on the Economic Growth: The Case of Ethiopia (Incoming Investments)
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Date
2025-03-10
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Publisher
AAU
Abstract
This study analyzes the economic changes by multinational corporations on Ethiopia throughout
the years using yearly time series data from 2005-2022. Using ARDL and VEC analysis, the
effects of multinational corporations on gross domestic product growth, the exchange rate, the
BP, and the Unemployment rate is been estimated in the long and short term. The study found
that the effects of multinational corporations on economic growth works passed on the short-
term aggregate demand and the long-term aggregate supply channel using GDP as an indicator of
the economic growth and its effect on the exchange rate, the balance of payments and the
Exchange rate. The devaluation of the national currency leads to economic growth only in the
short term. In the long run, it affects negatively the EG. Public expenditure is statistically as vital
as of the REER rate in explaining economic growth in Ethiopia