Factors Of Foreign Direct Investment Research Articles

Macroeconomic Determinants of Foreign Direct Investment Inflow in Laos

This study aims to study macroeconomic determinants of foreign direct investment inflow in Lao PDR, which includes macroeconomic variables such as gross domestic product growth rate (GDPGRO), government investment spending (GI), exchange rate (EXR), inflation rate (IFR), interest rate (IR), openness trade (OPTR) and money supply (MS) from 2001-2022. This results found that: The foreign direct investment inflow has 12,298.57 million US dollars on an average per year is equal to 559.03 million US dollars and has an average growth rate of 4.73% per year, for the public expenditure used to investment is increasing every year with an average growth rate of 10.96% per year. The exchange rate of kip per US dollar has an increasing trend but overall there is a growth rate equal to 1 digit only in 2022 there is a growth rate equal to 2 digits which is equal to 45.94%. For the inflation, the growth rate is 6.33% per year, which is the year with the lowest inflation rate is 2017 which is equal to 0.83% and the year with the highest inflation rate is 2022 which is equal to 22.96%, The decreasing trend in which the year with the highest interest rate on US currency loans is 2002 which is equal to 13.5% and the year with the lowest interest rate on US currency loans is 2011 which is equal to 8.15%, the open trade has an increasing trend. The year with the highest increase in 2021 is equal to 77.91% of GDP and the money supply is increasing every year. For the analysis of macroeconomic factors to foreign direct investment, it was found that the economic growth rate of gross domestic product (GDPGRO), public investment expenditure, the exchange rate of kip per US dollar and the money supply have a positive coefficient and reject the null hypothesis with a statistical significance level of 0.01 and 0.05 indicates that it is a doubtful factor for foreign direct investment to increase. Meanwhile, the inflation rate has a negative coefficient and rejects the null hypothesis at a statistical significance level of 0.05, which is a factor that reduces foreign direct investment transfers. For the interest rate in dollars and the open trade, there are accepted null hypothesis, it shows that there is no effect on the transfer of foreign direct investment.

Identifying Key Indicators for Successful Foreign Direct Investment through Asymmetric Optimization Using Machine Learning

The advancement of technology has led humanity into the era of the information society, where information drives progress and knowledge is the most valuable resource. This era involves vast amounts of data, from which stored knowledge should be effectively extracted for use. In this context, machine learning is a growing trend used to address various challenges across different fields of human activity. This paper proposes an ensemble model that leverages multiple machine learning algorithms to determine the key factors for successful foreign direct investment, which simultaneously enables the prediction of this process using data from the World Bank, covering 60 countries. This innovative model, which adds to scientific and research knowledge, employs two sets of methods—binary regression and feature selection—combined in a stacking ensemble using a classification algorithm as the combiner to enable asymmetric optimization. The proposed predictive ensemble model has been tested in a case study using a dataset compiled from World Bank data across countries worldwide. The model demonstrates better performance than each of the individual algorithms integrated into it, which are considered state-of-the-art in these methodologies. Additionally, the findings highlight three key factors for foreign direct investment from the dataset, leading to the development of an optimized prediction formula.

The Main Determinants Affecting Economic Growth in Sri Lanka

Every country in the world is trying to create a self-sufficient economy through economic growth and economic development. The concept of economic growth is very important there. There are many determinants that a country must achieve in order to achieve economic growth. Accordingly, this study studied the determinants that determine economic growth in Sri Lanka. It considered how the determinants of Exports, Foreign Direct Investment Inflow, Savings and Population Growth affect economic growth. For that, the research was conducted using secondary data related to the period 1991-2020. The Ordinary Least Square (OLS) method was used to identify the relationship between the determinants used and economic growth. Accordingly, it was identified that the factors of foreign direct investment and savings have a positive effect on economic growth, and the factors of Exports and Population Growth have a negative relationship with economic growth. Accordingly, it is important to pay close attention to foreign direct investment and savings in Sri Lanka moving towards economic growth.

The Economic Impact of FDI in the Case of China

Since the reform and opening, Foreign Direct Investment (FDI) is crucial to Chinas economic development and has greatly improved Chinas economy. China has also made great achievements in the field of import and export trade. However, foreign direct investment has also brought some negative effects. Therefore, this paper will comprehensively analyze the economic impact of FDI in China. This paper will directly support our views through data and charts, and deeply research the trends and characteristics of FDI. This paper also discusses the determining factors of foreign direct investment through case analysis. This paper deeply analyzed the positive and negative effects of FDI. Through our research, it found and gave some effective suggestions and methods for the negative effects.

Determining factors of foreign direct investment in Emerging Market Asia: A panel data analysis (2005-2020)

Foreign Direct Investment (FDI) is recognized as a major force that integrates developing countries into the world economy and is expected to be a key factor in driving sustainable and balanced economic growth. Emerging Market Asia countries are the host countries that receive the highest inflows of Foreign Direct Investment (FDI) compared to other emerging market countries. Even in crisis conditions, emerging market countries, especially the Asian region, are still the destination for investment because of their resilience to crisis shocks. In analyzing the determinants of Foreign Direct Investment (FDI), the variables used are Market Size, Trade Openness, Interest Rates, Control of Corruption, Education Levels and Telecommunication Infrastructure. The analytical method used is the Fixed Effect Model (FEM) Data Panel. The results of the study show that market size, corruption control and telecommunications infrastructure have a positive and significant effect on foreign direct investment inflows. The Education Level variable was found to have a negative effect on FDI inflows. While the variables of Trade Openness and Interest Rates have no significant effect. The implications of this research are that host country governments need to create an investment-friendly environment with transparent bureaucratic conditions to increase the trust of foreign investors. Additionally, governments also need to provide facilities that can support the private sector in creating productive investments, such as by improving GDP performance and enhancing infrastructure quality.

Deterministic Factors of Foreign Direct Investment Inflows and Nigeria Economy

This study investigates the deterministic factors of Foreign Direct Investment (FDI) inflows to Nigeria economy during 1980 – 2019 using Error Correction Model (ECM). The data such as Real Gross Domestic Product (RGDP), Market Size, Availability of Natural Resources, Political Risk, Infrastructural Development, and Trade Openness were sourced from the statistical bulletin of the Central Bank of Nigeria (CBN). The result shows that Market size (at lags 2 and 3) and Trade-openness have positive but insignificant effect on RGDP in Nigeria while infrastructural developments are found to be positive and significant function of RGDP. The results also reveal that in the long-run, the available natural resources exert negative and significant impact on

The Determining Factors of Foreign Direct Investment (FDI) Inflows: Empirical Studies from the Southeast Asian Countries

The purpose of the study estimates the possible causal relation between direct foreign investment with intertwined political and economic factors ranging from the investment climate reform initiative, tax policy conducted by the government, size of the government, and political institution. The sample of this study consists of ten countries in the Southeast Asia region. Our study utilizes time series data of 11 years from 2010 to 2020, to empirically tested three proposed hypotheses by using panel data regression analysis. Our statistical results show that determinants of direct foreign investment can be uncovered through economic rather than political factors. This study provides a negative relationship between the political institution factor (proxied by the veto player) and FDI inflow. On the contrary, the EODB score does not affect FDI inflow by controlling covariates. Moreover, our study could not provide robust evidence that an effective average tax rate could affect the FDI inflow which is contrary to literature expectation. However, our causal inference may suggest that previous FDI inflow is the best predictor for the FDI inflow.

Official visits and foreign direct investment

This paper examines the effect of official visits by U.S. Presidents and Secretaries of State on foreign direct investment inflows. The key difficulty in determining a causal effect is the issue of endogeneity. To address potential endogeneity, we use the Endogenous Treatment model (ETM). The estimation results provide evidence that the official visits of U.S. Presidents have a statistically significant positive effect on both foreign investment inflows from the U.S. and on total foreign direct investment inflows. This is robust even after the inclusion of other control variables identified by the literature as confounding factors for foreign direct investment. When we examine the effect of different types of visits, the results show that bilateral meetings during the official visits of U.S. Presidents have a statistically significant positive effect on both foreign investment inflows from the U.S. and total foreign direct investment. These results imply that the visits of U.S. Presidents offer a signal of the confidence of American administrations in the host country, which may in turn encourage American and non-American firms to invest in that country.

Factors of international trade and environmental degradation in the UAE: Moderating role of foreign investor characteristics

The purpose of the study is to identify the moderating role of economic factors of foreign investor over the relationship between economic factors and environmental degradation in Dubai which is among the fastest-growing economies and is attracting foreign direct investments (FDI) at the best. In order to meet the objectives of the study two hypotheses were developed. The first hypothesis deals with the direct effect of economic dimensions of foreign direct investment (Alkathiri, 2022), whereas, the second hypothesis deals with the moderating impact of foreign investor characteristics over the relationship between economic dimensions of foreign direct investment and environmental degradation. Both hypotheses have been checked over the primary data collected from the executives of multinational companies operating in Dubai. The findings of the study revealed that economic dimensions of foreign direct investment have a significant impact on environmental degradation. Likewise, foreign investor characteristics hold a significant moderating role in the significant relationship between economic factors of foreign direct investment and environmental degradation (Khan & Agha, 2015). The study showed some limitations and opened the horizons for future research.

Moderating Role of Foreign Investor Characteristics on the relationship between Regulatory Factors of International Trade and Environmental Degradation in UAE

The study has been conducted to analyze the moderating role of economic factors of foreign investor over the relationship between regulatory factors and environmental degradation in Dubai. The study has been conducted in Dubai considering the country as a fastest growing economy and attracting foreign direct investment in all fields. For the purpose of fulfilment of the study objectives the research developed two hypotheses. The hypothesis was tested over a sample of 335 responses generated from the executives of multinational firms of Dubai. The results confirmed that regulatory factors have a direct impact over environmental degradation, similarly, foreign investor characteristics also have a significant moderating role over the significant relationship between regulatory factors of foreign direct investment and environmental degradation. The study is important for the policy makers to develop such rules that negative influence over the environment may be curtailed.

The Effect of Economic Liberalization on Foreign Direct Investment

Purpose - This study analyzed the correlation between economic liberalization and foreign direct investment. The purpose of this study is to seek ways to attract foreign direct investment from developing countries. Design/methodology/approach - This study analysed with observations of 19 from 2000 to 2018 using a fixed effect model, a random effect model, and a two-way fixed effect model. Findings - First, it was found that economic liberalization had a positive effect on attracting foreign direct investment in the early stages of economic liberalization. Second, it was found that economic liberalization in the deepening stage of economic liberalization had a negative effect on attracting foreign direct investment. In general, it was found that the higher the level of economic liberalization in developing countries is not accompanied by innovative changes in the industrial structure, the higher the level of economic liberalization is likely to decrease the inducement of foreign direct investment due to negative factors such as an increase in labor costs. Overall, this study approved that Economic liberalization have a non-linear (inverted U-shape) relationship with the inflow of foreign direct investment. Research implications or Originality - First, this study attempted to expand the variables for the determinants of FDI by analyzing economic factors which is a determinent of FDI. Second, economic liberalization generally has a positive effect on foreign direct investment, but it proved that it does not have only positive effects as a factor of attracting foreign direct investment in developing countries. The advantage of low wages in ASEAN countries acts as a factor for foreign direct investment, but as the degree of economic liberalization increases, the environment such as government size, guarantee of property rights, international trade freedom, fiscal soundness, and regulations change positively. On the other hand, it can be suggested that if the industrial level is less, it may lead to a loss of comparative advantage and a decrease in investment.

Research on the Foreign Direct Investment Factors of Japanese Hotel Industry in Taiwan-Taking Okura Hotel as an Example

Due to the impact of COVID-19 in 2019, the global hotel industry has been severely impacted by the disconnection of the tourism industry. However, even with the impact of the epidemic, the Japanese hotel industry’s investment in Taiwan has not stopped. What are the factors that drive the Japanese hotel industry to defy the threat of the epidemic and choose Taiwan as its destination for foreign direct investment? This is the research goal of this article. This article intends to adopt Push-Pull-Mooring (PPM)migration theory to construct the possible factors of why the Japanese hotel industry chooses Taiwan as its foreign direct investment destination. These factors consist of three effects to describe Japan Okura hotel’s migration. First, the push effect refers to factors that induce people to leave their place of origin. Second, the pull effect refers to factors that attract people to a destination. Third, the mooring effect refers to intervention variables for push and pull effects that facilitate or inhibit the determination of movement. The finding is that push and pull factors still play an active role in promoting Okura Hotel’s investment in Taiwan, even if the influence of some factors is slightly reduced due to the shift in international conditions. With the development of globalization and high technology, mooring factors are no longer the reason that hinders Japanese Okura’s investment in Taiwan. Combined with push and pull factors, PPM migration model can fully explain why the Japanese hotel industry chooses to conduct foreign direct investment in Taiwan, even if it is affected by COVID-19.It’s just that COVID-19 has not stopped so far, and the unstable situation on both sides of the strait may impact the original PPM model and affect the results of the analysis. It is worth further observation and research by subsequent researchers.

Why do the Chinese make direct investment in the Europe? Insights from disaggregated bilateral data

This study explores the economic factors of foreign direct investment (FDI) from China to Europe. By drawing data over 8 years and dataset from the International Monetary Fund (IMF) and World Bank (WB), we found that Chinese FDI outflows to Europe are driven by the recipient country's fundamentals (trade openness, resource, institutional quality, and economic growth). These findings confirm the current literature while asserting counterintuitive facts. One of many points is that China is less likely to seek out the investment channel in the large economic status. More importantly, this study differs from extant literature by using the disaggregated panel data of bilateral FDI and trade openness. Therefore, our results would draw policy implications in terms of international finance.

Ownership-Based Entry Mode Strategies and Limiting Factors of Foreign Direct Investment Undertaken by Polish Enterprises

The limiting factors of foreign direct investment (FDI) are of considerable significance to managers, governments, and scholars, as these factors directly influence the profitability of a foreign subsidiary and its parent multinational company. The aim of the paper is to present the results of research studies on the identification of FDI-limiting factors of the host country in relation to the firms’ ownership equity-based mode. It illustrates the results of a field survey involving direct interviews conducted with Polish companies as the direct investors. The research results confirmed that joint ventures might be used by Polish companies to reduce the difficulties related to the availability of resources. However, there was no strong conclusive evidence of the expected link between the higher barriers on running a business and the ownership equity-based mode.

The influence factors of the national roles in the FDI network: A combined methods of complex networks and Panel Data Analysis

This paper examines the influence factors of Foreign Direct Investment (FDI) and focuses on the two main questions to be answered: (1) How do the foreign direct investment (FDI) network form and (2) what factors affect the formation of foreign direct investment (FDI) Network. First, we identify the basic FDI relationship in the homogeneous complex network of nations from 2001 to 2012. Then, we use the network indicators such as FDI relationships, independence, information control ability, FDI inflows and FDI outflows in FDI relations to construct the panel regression model to analyze the influence factors for Foreign Direct Investment. The results indicate that (1) The number of the nations with FDI relationships is increasing for 2001 to 2012, which highlight the importance of FDI relationship; (2) The nations in the FDI relationship network are getting closer and closer and the information of the network is controlled by few nations; (3) National competitiveness and inflows of FDI are directly related to each other; (4) Depreciation of exchange rate against USD increase FDI. This paper can help policymakers to better understand the features of FDI and thereby provides new insight for attracting FDI to promote economic growth.

Economic Determinants of Foreign Direct Investment: Empirical Evidence from South Asian Economies

This study aims to explore the economic factors of foreign direct investment in five South Asian economies, including India,Pakistan, Bangladesh, Nepal, and Sri Lanka. Data period is ranging from 1996 to 2020. PMG panel ARDL model is used for estimating the coefficients of the investment demand function. I'm, Pesaran and Shin W-test and Levin, Lin, and Chu t-testsare used for finding stationary of the data. Panel Kao residuals co integration technique is applied for detecting the long-run co integration among the variables. This study finds that, first, economic growth, energy consumption, and education are positively contributing towards the inflow of FDI; second, gross capital formation, government debt, inflation, and debt servicing are negatively affecting the inflow of FDI in these economies. Based on the empirical findings, it is recommended that government should play an effective role in improving the economic growth, bringing stability in prices, and investing in the education sector to make the inflow of FDI more attractive. Implementation of effective debt-management policies also stands radical for the inflows of foreign direct investment.

THE FACTORS INFLUENCING ECONOMIC GROWTH IN INDONESIA

This research is based on the fact that the state of economic growth in Indonesia tends to fluctuate, even more often decrease. This is because the government policy is not appropriate to improve the economic growth of Indonesia. This study aims to determine and analyze the factors of foreign direct investment, inflation, international trade, and government expenditure that affect economic growth in Indonesia. The problem in this research is due to the limited fund in economic development both structure and infrastructure so that economic growth tends to decrease. Therefore, appropriate strategies must be taken to overcome the limitations in promoting economic growth. From this problem, this research aims to see how big influence of foreign direct investment (FDI), inflation (INF), international trade (NX) and government expenditure (GE) variable to economic growth. The data used in this study is secondary data (periodical data) in the period of observation 1996-2014 obtained from the World Bank and Statistics of Indonesia. To identify the influence of the variables used in this study used the VAR (Vector Autoregression) method. The results of this study show that equation regression shows that FDI (-1) has a negative influence on economic growth and FDI (-2) has a positive effect on economic growth, INF (-1) and INF (-2) have positive effects on economic growth , Variable NX (-1) has a positive effect on economic growth but NX (-2) has a negative effect on economic growth, and GE variable (-1) has a positive effect on economic growth while GE (-2) has a negative effect on growth Economy.

What drives the inflow of FDI in OIC countries? Evidence from Top 10 hosts of inward FDI flows

Purpose ­­­ – This study investigates the driven factors of Foreign Direct Investment (FDI) inflow in selected OIC member countries. The selection of samples observation based on the top 10 hosts of inward FDI flows countries, includes the United Arab Emirates (UAE), Morocco, Indonesia, Turkey, Iran, Egypt, Bangladesh, Kazakhstan, Oman, and Malaysia. Methodology – The data for this study are obtained from World Bank and United Nations Development Programme (UNDP) database for the period 2001-2018. This study adopted panel regression analyses and utilized the Random Effect Model. Findings – This study reveals that GDP and trade openness were positive and significantly plays a vital role in driving the FDI inflow. Whereas, the exchange rate, inflation, and human development index did not have a significant impact on FDI inflow in the top 10 hosts of inward FDI flows countries. Research limitation – The main limitation of this research is the lack of a variable that represents the Islamicity index, which can differentiate the driven factors of FDI in Muslim and non-Muslim organization countries. Practical implication – This study suggests that members of OIC countries should provide a conducive investment environment which is represented by higher GDP growth and engage in various international trade agreements because those factors have higher possibilities in impacting the FDI inflow. Moreover, the rules which describe the investment priority amongst the member of OIC countries must be ratified immediately to decrease the percentage of the FDI inflows goes to non-OIC members. Originality – This study has advanced the knowledge by examining the driven factors of FDI in the specifically selected members of OIC countries, which based on the highest FDI inward. Thus, this study provides significant insights for policymakers for the rest of the member OIC countries to attract FDI inflows referring to the top 10 hosts of inward FDI flows countries.

Analysis of Driving Factors of China's Direct Investment in ASEAN

Cooperation with ASEAN will not only speed up the adjustment of domestic industrial structure and resolve domestic excess capacity, but also achieve the purpose of marginal industrial transfer. It will also help ASEAN countries to develop together for mutual benefit. This article analyzes the current status of China's direct investment in ASEAN, and then combines the driving factors of foreign direct investment (natural resource-seeking, efficiency-seeking, and market-seeking) to analyze the specific driving factors of Chinese enterprises' direct investment in ASEAN. The results put forward the possible risks from the above three perspectives and countermeasures for Chinese companies, which make direct investments in ASEAN countries.

DETERMINANTES DE LA INVERSIÓN EXTRANJERA DIRECTA PARA COLOMBIA EN EL PERIODO COMPRENDIDO ENTRE 2000-2018

Dada la importancia que viene adquiriendo la inversión extranjera directa en los países, esta investigación se planteo como objetivo encontrar los factores determinantes de la Inversión Extranjera Directa que ingresa a Colombia en el periodo comprendido entre el 2000-2018, a través del análisis econométrico de series temporales en el software de libre distribución Gretl, cuyos resultados arrojaron que a pesar de que la tasa de desempleo y la tasa de interés son los factores que más influyen en la atracción de este tipo de inversión al país, son las dinámicas internacionales las que contribuyen a que las empresas trasnacionales se ubiquen en Colombia y no hay una capacidad real de atracción de los mismos, por lo cual se requiere un cambio de estructura económica.