Imports, remittances, direct foreign investment and economic growth in Republic of the Fiji Islands: An empirical analysis using ARDL approach

Abstract

     This study empirically examined the effect of external factors on economic growth in the Republic of the Fiji Islands (the Fiji Islands). The economic analysis was conducted using the recent time series quantitative technique and annual data from 1980 to 2015. This is of significant concern because the Fiji Islands since independence have been struggling to achieve impressive and sustained growth episodes. From the analysis and economic growth viewpoint the external factors, namely imports, remittances, and foreign direct investment, are indeed important. Imports were found to have an adverse outcome on economic expansion in the long term. Furthermore, remittances and foreign direct investment positively influenced economic growth both in the long run and the short run for the Fiji Islands. The study proposes that the government should pursue appropriate policy actions to reduce imports and draw remittances and foreign direct investment to improve economic growth.