ABSTRACT This article aims at analyzing the role of foreign direct investment (FDI) outflows
in economic performance and the impact of economic growth on outward FDI with the data from
Japan. Bivariate and multivariate Granger causality frameworks have been used in this study. The
results suggest that the conclusion of bivariate framework may not be valid because it allows
omission of important variables. The results of the multivariate framework show that there is a
long-run positive unidirectional causality from outward FDI to gross domestic product (GDP)
per capital. In the short-run, both per capital income and outward FDI do not allow Granger
causality