The attempt of this paper is to find an empirical relationship between Foreign Direct Investment and New Firms (Paid up Capital) and Gross Capital Formation (proxy for business growth) and Credit to Commercial Sector and Gross Capital Formation using the test of stationarity (ADF, PP, and KPSS...

Discussion about the positive and negative effects of foreign private investment has been going on for years. In the opinion of the authors, the varying benefits and costs of foreign investments to a host country suggest specific policies to optimise their mix.