Abstract

The impact of the local SMEs sector on FDI and the mediating effect of IFRS adoption in developing economies: The case of Algeria

Highlights

  • Small and medium sized enterprises are of great importance in all countries of the world

  • In light of the above, the added value of this research is to study the adverse impact on the Algerian economy in the period 1970-2017 through our response to the main problem of: What role do Small and medium-sized enterprises (SMEs) play in attracting foreign direct investment (FDI) under international accounting standards?

  • With respect to model 1, the results indicate that LnSMEs has a very high significant impact on FDI inflows at 1 per cent level implying that a 1 % increase in LnSMEs leads to nearly 54% increase in FDI

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Summary

Introduction

Small and medium sized enterprises are of great importance in all countries of the world. Small enterprises have a positive and essential role in developing countries in terms of providing employment opportunities for all social groups. This is especially so for entrepreneurs, contributing to increasing income and partial self-sufficiency for some goods and services needed by society. In light of the above, the added value of this research is to study the adverse impact on the Algerian economy in the period 1970-2017 through our response to the main problem of: What role do SMEs play in attracting FDI under international accounting standards?. This study was based on the ARDL method to study the impact of both small- and medium-sized enterprises and the application of international accounting standards on foreign direct investment, which is concerned with studying the impact in the short and long term. This paper is structured in the following way: First; introduction and previous studies, second; methodology, third; results, fourth; analysis of results and a discussion of results and conclusion

Literature review
Data sources and research variables
Model specification and estimation technique
Empirical results
Descriptive statistics and the correlation matrix
Unit root tests
Bounds tests for cointegration
The long and short run estimation findings
Toda-Yamamoto granger causality test
Findings
Discussion of results and conclusion
Full Text
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