“Assessment of foreign direct investment, export and economic growth on the example of Kazakhstan”

The article considers the problem of estimating the communication of foreign direct investment, net exports and economic growth. The Republic of Kazakhstan is taken. As an example, based on the method of calculation of the gross domestic product (GDP) expenditure and using the method of regression analysis, the impact of foreign direct investment (FDI) and net exports to GDP and interaction of FDI and net exports as components of GDP are evaluated.


Brief literature review
An important role in the formation of the methodological framework for assessing the effectiveness of investment activity played a theoretical the exploration classics theories of FDI: C. Kindleberger (2010), B. Blonigen (2007), J. Dunning (1998), J. Markusen, (2000) studied the issues related to the causes and consequences of the movement of capital. Special contribution in identifying the impact of FDI on economic development of the recipient country has made, whether academic economists who developed the concept of FDI: K. Akamatsu, R. Vernon, V.A. Launhardt, Palander T., G. von Thünen, C. Heimer, X. Chenery, P. Eckstein. There are the results of studies of contemporary authors. For example, Sajid Anwar, Lan Phi Nguyen (2011) in 2011 conducted a study that shows the impact of FDI on net exports slightly over the period, but significant positive correlation seen after the Asian financial crisis (1998)(1999)(2000).
The result of the study conducted by Xiaolan Fu, V.N. Balasubramanyam (2005) shows that FDI has a significant positive effect on export growth. Exports, in turn, by means of injections of FDI is essentially «vent for surplus» for labor that contributes to the growth of employment. Ramazanov, A., B.Uteev (2013) conducted a study of foreign portfolio investment in the emerging stock market. The result of the study -portfolio foreign investment affect the development of the stock market, which has an impact on economic growth.
The research made by authors in Kazakhstan shows only analysis of value of FDI attraction and its allocation by economic sectors. For example, the articles of A.,Waikar, L., Jepbarova, S., Lee(2011), Tolkyn Azatbek, Altay Ramazanov, 2016 A.Khoich (201). Other publications are considering factors of economic growth in Post-Soviet countries. For example, L., Melnyk (2011) in his study, underlines significance of additional factor of economic growth as country's policy.
The purpose of the study is to determine the components have a significant impact on the change of economic growth and evaluation of their influence.

Results of the study
Kazakhstan is a leader in attracting investments on the post-soviet space. According to the UN Trade and Development Conference (UNCTAD) in 2014 Kazakhstan took the 19th place among the top 20 leading countries in terms of attracting foreign direct investments. In 2014 the gross inflow of FDI to Kazakhstan reached 28.9 billion dollars. Kazakhstan takes the second place among the CIS countries in terms of the volume of accumulated FDI per capita, which is 12 067.6 US dollars.  Efficiency of investments is important for the host country's economy: an increase in the scale of the investment without a certain level of its efficiency does not lead to sustained economic growth. Therefore, in this study, we aim to identify and evaluate the mutual investments in the nature of According to the method of calculating, the GDP expenditure consists of the following parameters (1) The final GDP = consumption + investment + Government spending + Net exports (exportsimports) From this equality to detect interference and to determine its extent, it is necessary to provide at least two indicators. As such we have chosen indicators of FDI and net exports. The time period taken last 6 years. FDI -x 1 (bln. Dollars. US / year), net exports at current prices, the total value for the year -x 2 (bln Dollars. US/year), and as a result of the country's GDP (y) ( Table 1). Calculate the correlation coefficient for the linear relationship and existing factors -x 1 and x 2 . To find the coefficient of correlations is necessary to find the following parameters: dispersion srednekvadcratic deviation of the investment and the standard deviation of GDP.
The parameters of the regression equation.
x = xi n = 24.08 regression analysis of FDI (Table 2). For factor x 1 . ie investments after the substitution data into the formula, the following correlation coefficient r 1 (7): Where x 1 and y -standard deviation or the square root of the variance factor and resultant variable respectively.
The regression coefficient b = 10.52.
Factor a = -85.1 formally shows predicted level "y", but only if x = 0 is close to the sampling values, final values of the calculations are presented in Table 3.
In order to make better assessment of interdependence between indicators the coefficient of elasticity is calculated. The average coefficient of elasticity (E) shows how many percent the GDP changes from its average value when changing the investment of 1% of its average value.
The coefficient of determination (13)  Consider the effect of net exports to GDP. To this raw data for these calculations are presented in Table 4. Calculate the ratio of the covariance.
cov(x,y) = x • y -x • y = 269.88 (14) Calculate the close connection between the measure of selective linear correlation coefficient-to (15): We define the standard deviation (16, 17) where x 2 -the value of net exports; and -the value of GDP, x ap. -The mean value of the trait.

Note -compiled by the authors based on their own calculations
To factor x 2 , is net exports after setting data, we obtain the following correlation coefficient r 2 : The coefficient of elasticity The coefficient of determination From these data it is possible to observe the impact of net exports to GDP, which is a direct bond, as the coefficient of correlation, of positive, ranged from 0.5 to 0.7. Communication noticeable.
Simple Linear Regression coefficient: b = 2,6. This means that an increase in net exports to GDP KZT1 increased by 2.6 m.
The coefficient of determination of 0.48, respectively, in 48.89% of cases the change in net exports lead to changes in GDP. The remaining 51.11% of GDP changes are explained by factors not accounted for in the model. Figure 3 shows the interaction of net exports and GDP. The regression coefficient b undesirable to use for the direct evaluation of the impact of factors on a productive feature if there is a difference of units in a productive indicator and factor variable x, in such cases the coefficient of elasticity is calculated. The average coefficient of elasticity E shows how the result y will change in average percent from its average value when the factor x changes on 1% from its average value.
In this case, the coefficient of elasticity (26) is greater than 1. Thus, if FDI changes on 1% net exports will change by more than 1%, which shows the significant impact of FDI on net exports.
According to the analysis of the relationship between two factors of FDI and net exports, we can say that the relationship between them is strong and direct correlation coefficient 0.88. Figure 4 shows the dynamics of indicators of FDI and net exports. The regression coefficient of 2.6. This means that an in c re ase in FDI KZT1 ne t e xpo rts in c re ase by 2.6 tenge. In other words -FDI significantly affect net exports. This effect can be explained by the fact that the largest share in the export of mineral products, including oil, gas condensate, ferrous and non-ferrous metals ( Figure 5).
The main inflow of FDI was directed in these areas of activity during the study period. In other words, FDI in these areas are the main factor in the growth of production.

Output
As a result of this work structural, sectoral, correlation and regression analysis was carried out, which revealed the existence of a multiplier effect, i.e., positive impact of foreign direct investment on economic growth and exports to Kazakhstan.
It should be noted that the multiplier effect works in the opposite direction. With a slight reduction in investment spending can occur a significant reduction in income. Therefore, for stable and balanced functioning of the economy should provide a certain value of the coefficient of animation to create conditions for the smooth implementation of the investment process should be provided.
Multiplier effect, investments have a positive impact on gross domestic product. FDI and exports have a positive impact on economic growth.
The results of the analysis revealed a significant relationship between the indicator of FDI, net exports and GDP in Kazakhstan. A model demonstrates a strong dependence of the economy of Kazakhstan on external investments.
Correlation and regression analysis made it possible to reveal the existence of a multiplier effect, in other words, the positive impact of FDI on economic growth and export in Kazakhstan. For example, 1 tenge invested foreign direct investment increases the GDP of Kazakhstan by 10.5 tenge.
FDI is a source of structural re form s in the re al sector of Kazakhstan. They are the direct source of investment in the production of goods and services, allowing to update the production, to ensure the involvement of the latest technology, global technology, know-how and advanced management methods. As a result, there is an increase in labor efficiency and growth in production and exports.
It should be noted that the multiplier effect works in the opposite direction. A slight reduction in investment expenditures can occur a significant reduction in income. Therefore, it is necessary to provide a specific value multiplication factor for a stable and balanced functioning of the economy, to create conditions for the smooth implementation of the investment process.
The study has practical implications, since it gives the opportunity to evaluate, to predict the expected effect from attraction of FDI in the future.
Kazakhstan should consider attracting investment as a priority in national policies and provide a redistribution of investment funds in the processing industry and production of high value added finished products. It will help to achieve a positive long term multiplier effect.