Can a change in FDI accelerate GDP growth? Time-series and ANNs evidence on Malta

This paper aims to examine the relationship between FDI and economic growth in Malta over the years 1971–2017. Unit root and stationarity tests reveal that FDI is stationary, while real GDP, trade, and manufacturing are integrated of order 1. The results of causality tests show that the neutrality hypothesis holds, given the fact that any statistically significant causal relation emerges between FDI and economic growth. Moreover, robustness checks used a new Artificial Neural Networks (ANNs) algorithm. This procedure is able to predict the change in FDI concerning Maltese economic growth. Relevant policy suggestions emerged with empirical results