Amount Of Foreign Direct Investment Research Articles

THE RELATIONSHIP BETWEEN FDI AND ECONOMIC GROWTH IN INDIA. A TIME SERIES APPROACH

Foreign Direct Investment (FDI) has gained importance after the second world war. In broader sense Foreign Direct Investment incorporates the establishment of up to date and advanced facilities, mergers and acquisitions, investing the profits earned from other overseas business activities, providing loans to other companies etc. In narrow sense the Foreign Direct Investment means investment in the country other than the investors own country. FDI can be better understood by studying the real reason that why the companies have shown interest in investing abroad rather than exporting and outsourcing their products to domestic firms. In due course of time many theories and approaches were developed to explain FDI. Although several researchers have tried to explain the phenomenon of FDI, we cannot say there is a generally accepted theory, every new evidence added some new elements and criticism to the previous ones. FDI in India is playing a noticeable role in the growth and development of the country. India is one of the important countries of the world which is able to receive substantial amount of FDI. The present study has made an effort to see the relationship between the FDI and Economic growth in India. GDP has proxies for economic growth. First the Johansen cointegration test result shows the long run relationship between variables and the Granger causality test result exhibits that there is unidirectional Granger causality between FDI and GDP. Next the Multiple Regression model result presents that the estimated coefficients on FDI & exports have a positive relationship with GDP. Therefore, it is statistically revealed that FDI and Exports are instrumental in influencing the level of economic growth in India. India is having certain drawbacks like Weak infrastructure, Complicated tax structure, Restrictive labor laws, Bureaucracy and Corruption. Unless and until these challenges are met with, India will never compete with China regarding FDI inflows. KEYWORDS: Foreign Direct Investment, Gross Domestic Product, Economic Growth.

Impact of Foreign Direct Investment on Green Total Factor Productivity: New Evidence from Yangtze River Delta in China

China has entered a period of high-quality development. As an important feature of high-quality development, green total factor productivity (GTFP) has attracted much attention. With the opening-up and economic globalization, the Yangtze River Delta, one of the strongest and most technological regions in China, has been attracting an increasing amount of foreign direct investment (FDI). This study investigates if FDI is conducive to GTFP under the constraints of specific resources and a specific environment, which has important practical significance for the utilization of FDI in the Yangtze River Delta and China. Through a literature review and sorting the current FDI in the Yangtze River Delta, the GTFP and its decomposition indicators of 27 cities from 2004 to 2019 are calculated based on their energy consumption and pollution. Using the fixed-effects model and threshold model of panel data, this study tests whether FDI promotes GTFP and whether a nonlinear impact of FDI on GTFP exists. It finds that (1) the GTFP of most cities in the Yangtze River Delta improved during the sample period, but their annual growth declined. Technology is the dominant factor affecting the growth of GTFP. (2) FDI in the Yangtze River Delta has increased, and the investment structure has improved, but the distribution among cities is uneven. (3) The scale and quality of FDI have a positive impact on GTFP, which supports the “Pollution Halo” hypothesis. Economics, education, networks, and trade openness can promote the growth of GTFP, while environmental regulation, government intervention, and industrialization have a negative impact. (4) The quality of FDI, economics, the industrial structure, the environmental regulation, and the internet are each a significant single threshold characteristic for the impact of FDI on GTFP. When one of these factors is lower than a certain threshold, FDI has less impact on GTFP. When one exceeds a certain threshold, FDI’s positive promotion effect on GTFP significantly improves. Based on the analysis, this study offers some suggestions. The government should improve the FDI selection mechanism based on realities, make appropriate environmental regulatory policies, strengthen the construction of networks, and improve the “Internet+” effect on productivity.

DETERMINANTS OF INDONESIA’S TRADE BALANCE : A VECM MODEL APPROACH

Trade Balance is the main indicator in external competitiveness. The condition of the trade balance in Indonesia tends to experience unbalanced conditions every year, so this study aims to see the relationship between the variables of Exchange Rate, FDI and GDP to the Trade Balance in Indonesia. The data used is a time series for 43 years (1980-2022) using the Vector Error Correction Model (VECM) method to analyze the relationship and response between variables in the term short and long term. Short-term results show that the Exchange Rate, Foreign Direct Investment (FDI) and Gross Domestic Product (GDP) do not affect the surplus or deficit of Indonesia's Trade Balance. While in the long run, Exchange Rate appreciation has a negative effect on the Trade Balance, the amount of FDI has a positive impact on the Trade Balance, and the amount of Gross Domestic Product (GDP) affects the deficit in the Trade Balance. The use of monetary policy can help stab ilize exchange rates, increase exports through increased foreign investment, maintain the value of exports, and reduce trade deficits. Rephrase

The belt and road initiative: a spatial empirical analysis of economic performance in Central Asia and the South Caucasus

This article focuses on China’s FDIs and mutual trade with five Central Asian countries, three South Caucasus countries and Iran within the framework of the Belt and Road Initiative (BRI). The study examines how the interaction of mutual foreign trade and China’s FDIs affects longitudinal income changes in these countries and to what extent the empirical evidence can demonstrate the significance of China’s investments and trade on their economic growth. Employing panel-spatial econometric models, the study assesses whether a discernible increase in total income occurred before and after 2013, exploring potential spillover effects from the spatial neighborhoods. The findings from the panel regression model reveal that the labor stock and the amount of foreign direct investments from China do not exhibit a statistically significant effect on the economic growth of these countries. However, the BRI positively impacted these economies, primarily through enhanced trade with China rather than FDIs from China.

Factors Affecting Poverty in Central Java Province for the Period 2017-2022

Poverty is a serious issue that is hard to ignore in many Indonesian provinces, especially the province of Central Java. This study uses secondary data in the form of a datapanel with cross-section 35 districts / cities and time series for 6 years to measure four independent variables—the city minimum wage (UMK), open unemployment, the human development index (HDI), and foreign investment—and one dependent variable—the poverty variable (Y). The goal is to determine the factors that affect poverty in the province of Central Java. This study's data analysis technique is panel data regression with a Fixed Effect Model (FEM) approach, which is handled with version 12 eviews. Because the District Minimum Wage (UMK) variable had a probability value of 0.0001 < 0.05 and a coefficient value of -5.73000, the study's findings demonstrated that it had a negative and substantial impact on poverty. With a prob value, the Open Unemployment variable statistically significantly and favorably affects poverty. 0.0000 less than 0.05. Furthermore, because the HDI variable has a prob value, research has demonstrated that it significantly and negatively affects poverty. the HDI's ability to lower the number of people living in poverty (0.0008 < 0.05). However, because the Foreign Investment variable has a low value, it was unable to demonstrate that it had an impact on poverty. The results indicated that the poverty rate was unaffected by the amount of foreign direct investment, with 0.7696 > 0.05. The study's overall findings demonstrate that 56.8% of poverty can be described by the four independent factors, with the remaining 43.2 percent being explained by variables not included in the research model.

Nexus between formal institutions and inward FDI in India: a nonlinear autoregressive distributive lag approach

PurposeThis study presents time-series data estimations on the association between the indicators of institutional environment and inward foreign direct investment (FDI) in India utilizing a comprehensive data set from 1996 to 2021.Design/methodology/approachThe study employs the nonlinear autoregressive distributive lag (NARDL) model. The asymmetric ARDL framework evaluates the existence of cointegration among the factors under study and highlights the underlying nonlinear effects that may exist in the long and short run.FindingsThe significance of coefficients of negative shock to “control of corruption” and positive shock to “rule of law” is greater when compared to “government effectiveness, regulatory quality, political stability/absence of violence.” The empirical outcomes suggest the positive influence of rule of law, political stability and government effectiveness on FDI inflows. A high “regulatory quality” is observed to deter foreign investment. The “voice and accountability” index and negative shocks to the “rule of law” are exhibited to have no substantial impact on the amount of FDI that the country receives.Originality/valueThis study empirically examines the institutional determinants of FDI in India for a comprehensive period of 1996–2021. The study's findings imply that quality of the institutional environment has a significant bearing on India's inward FDI.Peer reviewThe peer review history for this article is available at: https://publons.com/publon/10.1108/IJSE-05-2023-0375

A Critical Assessment of the Nexus between Foreign Direct Investment and Economic Growth in the Nigerian Context

Foreign Direct Investment (FDI) is the interaction of the rest of the world with a domestic economy. These interactions influence economic growth, depending on a number of determinants, such as: foreign trade policy, corruption, security, form and system of government, exchange rate, monetary and fiscal policy, economic equipment, infrastructure and availability of human capital, etc. The amount of FDI a sector will attract will be empirically determined, and its importance to the country will go a long way in determining the country's focus on continued economic growth. This study examined the impact of FDI on Nigeria's economic growth. The study focused on two key variables, namely FDI inflow and Nigeria's economic growth. Economic growth, the independent variable, is represented by three substitutes; Gross domestic product, gross investment and labor productivity. The investigation period extended from 2010 to 2019. In this study, the correlative research design was chosen. Descriptive statistics, Pearson's correlation, and regression analysis with SPSS 23 were used to analyze the secondary data collected from the National Bureau of Statistics’ Reports. The study found out that FDI has a negative but insignificant association with Nigeria's economic growth. The study, therefore, made the following recommendations: the government should encourage economic growth through start-ups, entrepreneurship and innovation; Nigeria should invest and accumulate knowledge, human/physical capital and promote the adoption of technologies; finally, domestic savings should be mobilized by the government through tax cuts, job creation, and improving the financial system to increase capital formation.

A decade of China-Pakistan Economic Corridor: An explorative study of its role in the economic and political development of Pakistan

Pakistan is grappling with significant economic and political challenges stemming from various factors. Positioned at the heart of the Chinese Belt and Road Initiative, Pakistan has been presented with a diverse array of opportunities encompassing trade, investment, energy resource development, Special Economic Zones (SEZs), the expansion of the Gwadar port, integration of its economy with neighboring nations via various connectivity projects, and the generation of employment prospects. Given the contemporary interdependence of economic performance and political stability, the potential for economic stability and the creation of opportunities through the China-Pakistan Economic Corridor (CPEC) is seen as crucial. The project helped Pakistan to attract a huge amount of Foreign Direct Investment (FDI), created hundreds of thousands of jobs, significantly improved infrastructure, established nine SEZs, developed Gwadar port, increased its trade volume with China and controlled energy crisis to a significant level. Political development, stability and peace have also been positively influenced by economic development. This study aims to evaluate the impact of CPEC from both economic and political perspectives, especially as it approaches its 10th anniversary, and assess how it has shaped Pakistan’s economic and political landscapes. The forthcoming second phase of CPEC is poised to further bolster Pakistan’s economic growth, fortify industrialization through SEZs, and enhance its international trade. Additionally, the project is set to transform Pakistan into a pivotal regional trade corridor through its advanced connectivity initiatives and the development of the Gwadar port.

Financial Development and Economic Growth

This paper aims to examine the effect of financial developments and economic growth in Nepal employing Autoregressive Distributed lag Model (ARDL) approach of cointegration using the time series data for the period from 1972-2022. Nepal is a unique country for specific case study as it represents the group of landlocked Developing countries and lagging, behind even having lots of natural beauties, and resources within the country. After a recent, significant political shift, Nepal's stable government is currently actively pursuing significant amounts of foreign direct investment. We develop a model with four proxies of financial development (Broad money, Domestic credit by private sectors, Foreign Direct Investment, Gross Capital formation) and econometrically test their contribution in economic growth. And the long bound test suggests that we can reject the null hypothesis of no co-integration and conclude that the variables are co-integrated at all significance levels. Therefore, based on the F-bound test results, we can conclude that there is evidence of co-integration between the variables in the ARDL model.

Impact of trade liberalisation on employment patterns: The experience of India’s organised manufacturing

This study investigates the impact of trade liberalisation on employment levels at three different employment patterns in India's organised manufacturing industry. These employment patterns apply to three types of workers who face disadvantages: contract vs. regular, women vs. men, and unskilled vs. skilled. A theoretical and empirical framework linking employment patterns to trade, foreign investment, R&D intensity, and capital intensity has been developed and tested for a sample of Indian organised manufacturing industries using a panel analysis with a fixed effect model. The findings suggest that trade has a negative impact on employment overall. Imports and foreign investment have a statistically significant impact on employment levels. As a result, the government should identify industries that get a large amount of Foreign Direct Investment. International corporations have no detrimental effect on manufacturing employment in India when compared to their domestic competitors, and they pay their employees substantially more.

The influence of foreign direct investments on the economic development of South Caucasus countries

A nation's pace of economic growth in the South Caucasus region is directly influenced by the volume of foreign direct investment (FDI) it gets. This research project examines the effects of foreign direct investment (FDI) on economic growth and stability, with a focus on the three nations of Armenia, Azerbaijan, and Georgia. This research seeks to understand three important aspects: the trends in FDI influx; the industries that draw the highest concentrations of FDI; and the societal consequences of FDI. Examining these three crucial facets of the whole is the aim of this study. The goal of this study is to look at the trends in foreign direct investment (FDI), with an emphasis on the South Caucasus region's growing prominence as a desirable destination for financial investments. To achieve the objectives of this study, we will. Numerous various elements, such as its advantageous geographic position, an abundance of natural resources, and the formation of prospective markets, may be ascribed to its preeminence. The industries with the largest amounts of foreign direct investment (FDI) are also examined in this research, with an emphasis on the manufacturing, infrastructure, and energy sectors' critical roles in promoting economic growth. In this last section of the study, the socioeconomic effects of foreign direct investment (FDI) are examined. The creation of new job possibilities, the diffusion of recently produced technology, and the diversification of exports are some of these outcomes. One of the main topics of this conversation is how these effects contribute to raising the local quality of life and lowering the incidence of poverty. The aim of this research is to examine the many aspects of foreign direct investment (FDI) and how it affects the economic development of countries in the South Caucasus area of the globe. The purpose of this project is to provide useful information on the opportunities and challenges these nations face in their efforts to draw in and use foreign investments in order to achieve sustainable growth and prosperity. The data that will be offered will come from a range of sources, such as focus groups, questionnaires, and interviews.

Role of Foreign Investment (FDI) and Labor Productivity: Empirical Study in Vietnamese Provinces

The article analyzes empirically the role and impact of foreign direct investment (FDI) on labor productivity of provinces in Vietnam. Based on data of 63 provinces in the period 2010 - 2021, the research findings show 4 dimensions of FDI that have a positive impact on labor productivity including: (i) FDI amount or active accumulative implemented FDI in local economy, (ii) active accumulative registered FDI projects, (iii) employment in FDI sector, and (iv) net revenue of FDI sector. We found also 2 dimensions of FDI that do not influence significantly the labor productivity of Vietnamese provinces, including: (a) active accumulative registered FDI capital and (b) active FDI enterprises in the local economy. Based on the research results, we propose some recommendations in attracting FDI in Vietnamese provinces in order to increase their labor productivity.

The Belt and Road Initiative: Inclusive Globalization and Poverty Reduction

The Belt and Road Initiative (BRI) aims to increase connectivity between regions and countries that market forces excluded from the previous wave of economic globalization. Foreign direct investment (FDI) can create the conditions for the economic takeoff of least-developed countries (LDCs) and developing countries. Although Chinese FDI has nearly doubled since the launch of the BRI in 2013 compared to 2005–2013, it does not seem to be directed toward BRI member countries more than the non-member countries. One exception is South American BRI member countries, which have significantly increased their FDI inflows from China. This is not the case, however, for West Asian countries, where FDI growth has been lower for BRI countries than for the West Asian countries as a whole, and especially for sub-Saharan BRI countries, for which the amount of FDI has even decreased compared to the 2005–2013 period. The BRI’s slow start and the countries’ gradual entry may explain the delay in seeing the positive results expected from it reflected in the data.

Foreign Assistance, Institutional Quality and Economic Growth in Selected Sub-Saharan African Countries: 1990 – 2021

This study adopts the Augmented Mean Group (AMG) estimator to analyse the impact of institutional quality and foreign assistance on economic growth in Sub-Saharan African countries, using time series data sourced from the World Bank Development Indicators (WDI) and World Bank Governance Indicators (WGI) for the period 1990 to 2021. The study went a step further to determine whether there is a significant interactive development effect of foreign assistance and institutional quality in sub-Saharan African countries. The results show that foreign assistance has a positive conditional marginal effect on per-capita GDP, institutional quality has a positive conditional marginal impact on per-capita GDP and their interaction is also positive. The results are all statistically significant at 10% level of significance. Thus, foreign assistance and good quality institutions improves economic growth. This does not imply that; sub-Saharan African region should heavily rely on foreign assistance, without putting in place specific developmental efforts. Thus, it is opined that policymakers should regulate the allocation of foreign assistance and improve the quality of institutions. In doing so, the production capacity of the region would increase and the region would attract huge amount of foreign direct investment (FDI). Consequently, there would be a distinction between the amount of foreign assistance needed to lessen poverty and the levels of foreign assistance required to achieve economic growth. Keywords: Foreign Assistance; economic growth; AMG Estimator, CCEMG Estimator, Institutional Quality and Sub-Saharan Africa DOI: 10.7176/JESD/14-8-07 Publication date: April 30 th 2023

Look (Act) East Policy and Northeast India Achievements, Expectations and Realities

The government as well as a large section of experts claimed that the Look (Act) East Policy (LEP) could become an instrument of economic development for Northeast India through the expansion of trade and investments to the East and Southeast Asian countries. The claim is not only due to the strategic location of Northeast India but also to the abundant resources and potential for trade in the region. In this light, the present paper examines the achievements of Northeast India in terms of expansion of trade and investments during three decades of the LEP. The paper argues that the policy has failed to augment exports and also could not contribute to the economic development of the region as the region still continues to decelerate in socio-economic parameters, largely depending on central grants and aid. Moreover, Northeast India could attract a negligible amount of foreign direct investment even after three decades of economic reforms and the LEP. Finally, the paper also made a reality check of the ‘export-led growth’ strategy for the region, especially under the aegis of Act East Policy, given the stress on ‘connectivity’ development projects with South Asia, East Asia and Southeast Asia, where Northeast India is centrally located.

The impact of macroeconomic variables on foreign direct investment in Nigeria

This study's main goal is to determine the effect that specific macroeconomic factors have on the amount of foreign direct investment (FDI) flowing into Nigeria. The ex post facto research design was adopted, and it used exchange rate, inflation rate, monetary policy rate (MPR), and gross domestic product growth (GDP) rate as the macroeconomic variables. The quantity of inflow between 1986 and 2020 was made up of FDI (dependent variable). Because the model variables were integrated in a mixed order of both level and first difference, the autoregressive distributed lag (ARDL) technique was used. The selected macroeconomic variables and FDI were bound by a long-run connection, according to the results of the ARDL bounds test for cointegration. The calculated short-run coefficients showed that GDP growth rate and monetary policy rate were the primary macroeconomic variables that considerably increased FDI inflow in Nigeria, whereas inflation and exchange rate were the major macroeconomic variables that significantly decreased FDI inflow. In the long term, the GDP growth rate and the exchange rate had a beneficial influence on FDI influx, whereas the monetary policy rate had a large negative effect. According to these empirical findings, it is advised that Nigeria's monetary authorities should support strong GDP growth, exchange rate stability, and efficient monetary policy rates in order to draw FDI into the country and create efficient foreign exchange policies that will attract foreign investors.

АНАЛІЗ СТАНУ, ТЕНДЕНЦІЙ ЕКОНОМІЧНОГО РОЗВИТКУ ТА ПОЗИЦІЇ КИТАЮ В ГЛОБАЛЬНІЙ ЕКОНОМІЦІ

The paper is devoted to the analysis of China's position in the global economy. China became one of the fastest growing economies in the world since it’s opening to foreign trade and investment in 1979. The main factors that contributed to rapid economic growth were defined as: large-scale capital investments, rapid growth in productivity, economic reforms that led to the efficiency increasing of the economy, production growing and resources expanding for additional investments in the economy. The real annual growth of China's GDP from 1980-2022 was analyzed. From 1979 to 2017, China's real GDP grew at an average of almost 10% annually. But the COVID-19 pandemic and the measures taken to contain it caused the biggest slowdown in China's economic growth in 2020, to 2.2%. A comparison of the shares of China and the United States in the world GDP by PPP was made. Accordingly, the conclusion – it was the first case in history when China was the world's largest economy in 2017. It was determined that the United States and China are the two largest economies in the world by both nominal GDP and GDP per PPP (purchasing power parity). The US leads in nominal terms, while China leads in PPP terms, overtaking the US by 39%. Over the past few years China has become the world's largest exporter and ranks second place among the world's largest importers thanks to its huge active trade balance. According to the World Investment Report 2022 of the United Nations Conference on Trade and Development (UNCTAD), the United States and China are the main recipients of global FDI (foreign direct investments), as well as the main investors. As China continues to lead the global recovery from the adverse economic effects of the COVID-19 pandemic, foreign multinational corporations are doubling their investments in China, establishing thousands of new firms and expanding existing ones. The main recipients of Chinese FDI are Hong Kong, the US, Singapore and Australia. Hong Kong absorbs the largest amount of FDI from China and plays a special role. The distribution of Chinese FDI by sector shows that Chinese investors most prefer investments in leasing and business services, financial services and manufacturing.

Development in Different Sectors through China-Pakistan Economic Corridor (CPEC)

China-Pakistan Economic Corridor (CPEC) under the Belt and Road Initiative is one of the most notable collaborations (BRI) through the use of networks of roads, highways, and railroads, CPEC seeks to link China and Pakistan with the rest of the globe. CPEC will provide opportunities for the growth of the energy industry, rail and road infrastructure, and other areas. Since the bulk of the research focuses on the difficulties connected with the China-Pakistan Economic Corridor, the goal of this study is to examine the beneficial effects of this project, particularly for Pakistan (CPEC). To evaluate the contribution of CPEC to Pakistan's sustainable economic growth, this research evaluates the relevant literature. This research suggests that the CPEC is an ambitious development project since it requires a more extensive reorganization of Pakistan's economy. In addition to generating significant amounts of foreign direct investment for Pakistan, this project will also provide China access to a new market, which will increase its trade potential. This analysis found that the CPEC would boost regional connectivity, solve energy shortages, expand infrastructure, and foster people-to-people ties in both nations, all of which will assist to boost the tourist industry.

MACROECONOMIC ANALYSIS AND FORECASTING OF FOREIGN DIRECT INVESTMENT INFLOW: EVIDENCE FROM UKRAINE

Attracting foreign investment is a viable means of ensuring the economic growth of any country. The relevance of the study is substantiated by the creation of a favorable investment climate in the country, which will allow the establishment of guarantees of protection of foreign investments and stability of the legal basis for entrepreneurship performance. The article aims to analyze and forecast the inflow of foreign direct investment (FDI) into Ukraine. In order to achieve the stated purpose, the econometric model was developed, which demonstrates the correlation between macroeconomic indicators, their characteristics and the amount of FDI. A set of general scientific and special research methods were used, in particular: induction and deduction, grouping, summarization, comparison, complex and systemic approaches. The article reveals the essence of foreign investment for the Ukrainian economy and defines the characteristics of FDI. The impact of FDI on the economy of Ukraine is analyzed in detail and the conditions for their attraction are substantiated. Using statistical methods, the structure and dynamics of FDI by types of economic activity and investor countries are investigated. The conducted research has shown that through the attraction of foreign direct investment economic growth, the well-being of the population, the reduction of foreign indebtedness and efficient state capital investments are ensured. Taking all this into account the necessary preconditions for the attraction of foreign direct investments into the Ukrainian economy were substantiated.

Spatiotemporal Changes and Location Choice of Foreign Direct Investment in China

Foreign direct investment (FDI) has been pouring into China for decades. This article analyzes the spatial distribution and mechanism of FDI inflows to Chinese city-regions, combining location theories with the Chinese context. It provides a fresh perspective for understanding spatial FDI inflows in China. The spatial pattern of significant clustering features in FDI inflows remains, but it has shown a weakening trend over the past two decades. The Yangtze River Delta has grown as the largest agglomeration region of FDI in China. The great regional development in midwest China has brought large amounts of FDI to inland cities as well. These are atypical cases, though, as spatial dependence of FDI inflows based on geographic proximity is insignificant on a national scale. Local economic factors like energy supply, market consumption, and labor wages play roles in the spatial FDI inflows. This work can enrich the research practice and deepen the knowledge of spatial inequalities of FDI in the Chinese context.