World Development Indicators Data for Developing and developed Countries

The purpose of this research paper is to investigate the probable ways in which financial development and foreign direct investment (FDI) interact to affect economic growth in more than a hundred countries. A panel of dynamic data from 102 selected countries from 1981 to 2020 was employed. A combination of the random effect model, the fixed effect model, the pooled OLS model, and the two-step GMM model were employed to analyze the data. This study clearly shows that domestic investment in a number of selected countries (102) benefits from foreign direct investment as well as financial development.