eng Science and Education Publishing Journal of Business and Management Sciences 2013-12-11 1 6 133 138 10.12691/jbms-1-6-3 JBMS2013163 article Abdullah Alam abdullah_alam@yahoo.com 1 M. Usman Arshad 1 WasimUllah Rajput 2 Department of Management Sciences, International Islamic University Islamabad, Pakistan Director Staff College, National Bank of Pakistan, Islamabad, Pakistan The aim of this study is to have an insight into the causality relationships between economic growth and two of its key determinants, foreign direct investment and labor productivity. Error correction mechanism, through the implementation of generalized method of moments (GMM), is used to study the causalities between the three variables. This study encompasses data from nineteen (19) OECD member countries over a period of 1980-2009. Short-term causalities have been observed running from foreign direct investment to economic growth, labor productivity to economic growth and foreign direct investment to labor productivity. In the long-run, bi-directional causalities exist between economic growth and labor productivity, foreign direct investment and labor productivity. Also, foreign direct investment is observed to cause economic growth in the long-run. http://pubs.sciepub.com/jbms/1/6/3/jbms-1-6-3.pdf economic growthforeign direct investmentlabor productivitylabor economicsgeneralized method of moments (GMM) estimatorpanel causality analysis