The Effect of Capital Accumulation on Economic Growth in Somalia

Abstract

This study aimed to determine how 1980–2020 capital accumulation in Somalia affected the country's economic development. This research uses the OLS technique to analyze the correlation between investment and economic expansion OLS technique is used to analyze the correlation between investment and economic expansion in this research. World Development Indicator and SESRIC data were mined for their time series information.

The researcher utilized FDI, GDP, and Inflation as covariates to examine how these factors affect unemployment, and we looked at total saving, GDP, and gross capital formation as independent variables. Unemployed workers were used to quantify unemployment, real GDP was used to evaluate production, foreign direct investment (FDI) was used to evaluate net inflows at constant prices, and the GDP deflator was used to quantify price increases. The study's primary conclusions are that gross capital creation and saving contribute positively to economic development, whereas foreign direct investment has a negative impact.