FDI Inflows Research Articles

Uncovering the Mystery of Tax Collection and Money Supply in Targeting Industrial Success: A Case Study of Singapore

The economic vitality or momentum of any economy is contingent upon the success of the industrial sector. The rise in industrial production indicates economic progress, improved livelihoods, enhanced access to necessities and increased domestic investments. Economic strength transforms into economic weakness if the industrial sector is not producing the desired outcome. This study investigates how tax revenue and money supply relate to Singapore's industrial production in order to understand more about the shifting trends in the country's industrial output. This study takes into account FDI inflows, domestic listed companies and electric power consumption as controlling factors of industrial production function. The ARDL bounds test has been employed over the period from 1980-2022. The empirical findings provide evidence of cointegrating relation between industrial production and its regressors in the long run. The results further demonstrate that tax revenue as an instrument for fiscal policy and money supply as an instrument for monetary policy are significantly escalating industrial production but between both, money supply has a stronger impact on industrial production. This study suggests that expansionary monetary policy and expansionary fiscal policy may be adopted to accelerate industrial production in Singapore while keeping the cost of conducting these policies in mind. Furthermore, FDI inflows and domestic listed companies are also advised to be encouraged as these give a boost to industrial production.

Renewable energy, regional tourism, and exports to tackle stagnant growth in developed economies

This study examines the effects of energy resources in the form of clean and unclean energy on the economic progress of 30 selected developed economies. This study used data from 1990 to 2020 and it employs the CS-ARDL method to obtain results. The results present that both clean and unclean energy significantly stimulate economic progress. The findings further expose that foreign investment resources in the form of inflow are significant factors that accelerate economic progress in developed economies. The results reveal that tourism development, capital accumulation, and exports are significant factors in boosting economic progress in the selected economies. Estimates from Dumitrescu and Hurlin's method for heterogeneous panels confirm the presence of the feedback-effect hypothesis for unclean energy, while the energy-conservation hypothesis holds for clean energy. This study suggests that targeting low-cost clean energy production is crucial for promoting economic growth and protecting the environment through carbon mitigation strategies. There is also a need to develop a policy framework that emphasizes the transformation of industry towards clean energy at a macro level. Furthermore, transitioning from unclean to clean energy may enhance economic progress by improving environmental quality norms in the selected developed economies. Finally, policies for tourism development, export improvement, and increased inflow of FDI should be directed towards fostering clean energy agreements and achieving environment-friendly economic progress in developed economies.

Unveiling the Nexus: Analyzing foreign direct investment and energy consumption in shaping carbon footprints across Africa’s leading CO2-emitting countries

Carbon emissions have become a pressing global concern because of its contribution to climate change and environmental degradation. Given the urgency to tackle climate change, especially by reducing carbon emissions, this study focuses on Africa’s leading CO2 emitters from 2000 to 2020. The aims of the study are; to examine whether there is evidence of an energy-Kuznets Curve among the leading CO2 emitters in Africa, to examine whether there is evidence of an FDI-Kuznets Curve among the leading CO2 emitters in Africa, and to Identify the turning points. The study employs an innovative analysis of unbalanced panel data utilizing sophisticated econometric techniques, the contemporaneous correlation methodology, which are; the feasible generalized least squares (FGLS), and the panel-corrected standard errors (PCSE) to uncover insights. The results reveal consistency across all employed techniques. The study confirms the existence of an Energy-Kuznets Curve among the leading CO2 emitters in Africa; it also finds evidence of a U-shaped relationship between foreign direct investment and carbon emissions among the leading CO2 emitters in Africa; finally, it also identifies crucial turning points at 2760.12kg and 2886.29kg of oil equivalent per capita for energy use and 6.89% and 6.17% for FDI inflow, respectively. By investigating the factors influencing carbon emissions and evaluating their impacts, our study offers valuable insights for policymakers. These findings can inform the development of targeted interventions to curb emissions intensity, enhance energy efficiency, and foster the adoption of renewable energy sources.

Impact Of Foreign Direct Investment On Domestic Investment In Brazil

In an era marked by rapid globalization and intricate economic interconnections, FDI has emerged as a critical driver of economic growth in many developing nations. Brazil, as the largest economy in Latin America, has witnessed significant fluctuations in FDI inflows over the past decades. The question of whether FDI can stimulate domestic investment remains a topic of considerable interest among economists, policymakers, and scholars. This study delves into the complex relationship between FDI and domestic investment in Brazil, employing historical data, economic indicators, and existing scholarly research. Brazil, as a prominent emerging economy and a global economic force, has consistently attracted international investors and governments. The nexus between economic development and FDI has garnered global attention. FDI not only involves the allocation of financial resources from foreign entities but also entails technology transfer, managerial expertise, and access to international markets. While these inflows have the potential to stimulate local investment, economic growth, and job creation, concerns exist regarding their possible displacement or crowding-out effect on domestic investments. Understanding the intricate correlation between FDI and domestic investment in Brazil is of paramount importance, shaping investment policies within the country and offering valuable insights for other emerging economies seeking to strike a balance between foreign and domestic capital. This study examines the impact of FDI on domestic investment in Brazil, analyzing historical data, economic indicators, and existing literature to provide a comprehensive understanding of this complex relationship. The research draws on economic theories such as the neoclassical growth hypothesis, endogenous growth theory, and crowding-out hypothesis to explore the potential effects of FDI on domestic investment. It considers the regional disparities in FDI distribution and the sector-specific impacts of FDI in Brazil. Additionally, the study evaluates the role of government policies, trade openness, and financial development in moderating the relationship between FDI and domestic investment. Ultimately, this research aims to shed light on the multifaceted dynamics between FDI and domestic investment in Brazil. By addressing the positive and negative aspects of this relationship, it seeks to provide valuable insights for policymakers, economists, and businesses not only in the Brazilian context but also for other nations navigating the challenges and opportunities of FDI. The findings contribute to the global discourse on the impact of FDI on a nation's economic trajectory and offer guidance for informed policy decisions.

Resilience of developing economies to external shocks: empirical evidence from CEMAC countries

PurposeThis study aims to investigate the effects of three significant events – the 1994 CFA currency depreciation, the 2008 Global Financial Crisis (GFC), and instances of political coups – on the relationships between FDI inflow, economic growth, and governance within the Central African Economic and Monetary Community (CEMAC) countries. It seeks to evaluate how these events influence the linkages between FDI, economic growth, and governance, to aid the understanding of responses to external shocks and internal political disruptions.Design/methodology/approachThe study employs a panel Vector Autoregression (VAR) analysis using data from 1990 to 2019 by exploring the dynamic relationships among FDI inflow, economic growth, and aggregate governance indicators within the CEMAC sub-region. The analysis was conducted utilizing the EViews software package, facilitating robust examination through the introduction of the Bayesian VAR to facilitate the interpretation of parameters and the data.FindingsThe results indicate that, contrary to initial hypotheses, growth and governance do not emerge as determinants for attracting FDI within the CEMAC sub-region. However, governance stands out as a crucial determining factor for economic growth. Furthermore, the study suggests that the 1994 CFA currency depreciation, the 2008 GFC, and instances of political coups did not significantly impact FDI, growth, and governance within these countries. Despite the potential vulnerability of the CEMAC countries to external shocks, the effects of these events on the dynamics of FDI, economic growth, and governance were not apparent. Notably, political instability, as evidenced by coups, emerges as a significant factor shaping the interactions between FDI, growth, and governance in CEMAC countries.Research limitations/implicationsThese findings have significant implications for policymakers and stakeholders in the CEMAC countries. Understanding that governance has a central role in driving economic growth places great importance of prioritizing governance reforms to foster sustainable development. Moreover, the identification of political instability as a key determinant affecting the relationships between FDI, growth, and governance emphasizes the need for political stability and effective governance structures to attract and sustain FDI inflows as well as foster economic growth.Originality/valueThis study contributes to the existing literature by offering insights into the linkages between FDI, economic growth, governance, and external shocks within the CEMAC sub-region. By examining the specific impacts of the 1994 CFA currency depreciation, the 2008 GFC, and political coups on these dynamics, the study provides original perspectives on the resilience of CEMAC countries to external and internal disruptions.

The impact of house prices on FDI inflows: Based on 35 large and medium sized cities in China

The impact of house prices on FDI inflows: Based on 35 large and medium sized cities in China

How does oil policy uncertainty influence resource rents? New empirical evidence from Organization of the Petroleum Exporting Countries

AbstractThe uncertainty surrounding oil‐related policies has raised concerns about its influence on revenues derived from resource extraction activities. In this view, the current study aims to investigate the nuanced relationship between oil policy uncertainty (OPU) and resource rents, focusing on oil rents (ORTs), natural gas rents (NRTs), and total resource rents (TRT). Analyzing data spanning from 1985 to 2019 across Organization of the Petroleum Exporting Countries, various econometric models including DOLS, FMOLS, and autoregressive distributed lag are employed to assess the impact of OPU on resource rents. The empirical findings reveal a significant negative effect of heightened OPU levels on resource rents, indicating a reduction in ORT, NRT, and TRT. This negative impact underscores the deterrence of long‐term investments in oil exploration and production due to regulatory unpredictability, leading to decreased revenues from oil extraction activities. Additionally, increased OPU contributes to heightened volatility in oil prices, disrupting the stability of resource rents. Furthermore, variables such as FDI inflow, inflation rate, and banking sector development exhibit positive relationships with resource rents, emphasizing their role in bolstering revenues derived from natural resources. The study's implications highlight the necessity for policymakers to address and mitigate OPU to foster stability and sustainable revenues within resource‐driven economies. This study contributes to the existing literature by offering empirical insights into the adverse impact of OPU on resource rents.

How are Economic Governance Institutions Moderating the Effect of Economic Complexity on Trade, FDI Inflow, Environmental Degradation, and Economic Growth in Africa?

How are Economic Governance Institutions Moderating the Effect of Economic Complexity on Trade, FDI Inflow, Environmental Degradation, and Economic Growth in Africa?

Assessing the Economic Impact of IFRS Adoption on Financial Transparency and Growth in the Arab Gulf Countries

This paper examines the impact of adopting IFRS on economic growth and further development in the Arab Gulf countries, with a particular focus on Saudi Arabia, UAE, Qatar, Oman, Kuwait, and Bahrain. It, therefore, answers the research question of how IFRS adoption affects financial transparency, regulatory frameworks, and economic stability in general in oil-dependent economies. Using data from 2010 to 2020, the research uses regression models to test the influence of IFRS adoption on several key economic indicators. The results, thus, indicate that the adoption of IFRS considerably increases the level of transparency and, hence, enables the inflow of FDI as well, therefore ensuring economic growth. This result also sheds light on the critical roles that regulatory solid frameworks and political stability play in amplifying the benefits of IFRS adoption. However, family-based and state-owned enterprises’ resistance to increased demands for transparency is an issue that would provide a challenge. Implications for policy will be such that comprehensive reforms will be required with the countries’ regulatory frameworks, including more transparency and fitting the IFRS guidelines into local business practice and the cultural context. Future studies should also underscore sector-wise impact and go deeper into how cultural and institutional factors impact the effectiveness of implementing IFRS in the Arab Gulf region.

Fostering innovation through governance systems: empirical insights from South Asian countries

Purpose Innovation is necessary to ensure consistent economic growth and to meet the global competition. In view of this, the purpose of this study to check the effect of governance quality as a tool for fostering innovation performance. Design/methodology/approach The empirical analysis was arranged on 20 year’s (2000–2019) data from South Asian economies. Subject to the existence of cointegration, the authors use the fully modified ordinary least square model for regression analysis and check the robustness through robust least square model. Findings The empirical findings infer that all dimensions of governance have a positive significant impact on both research and development expenditures and trademark applications jointly known as innovation performance. In addition, the empirical analysis discloses the positive effect of all control variables, including FDI inflow, banking sector development, economic growth, ease of doing business index and government subsidies on innovation activities. The analysis confirms the “grease the wheel” role of governance in fostering innovation. Practical implications It is apparently recommended to strengthen the exercise of better governance to harvest better innovation scores. Originality/value This study advocates the positive role of individual dimensions of governance recommended by existing literature and complements the literature by jointly exploring the impact of all governance dimensions on overall innovation performance.

The Relationship between Trade Openness and FDI Inflows: Evidence-Based Insights from ASEAN Region

The Relationship between Trade Openness and FDI Inflows: Evidence-Based Insights from ASEAN Region

DYNAMICS OF FDI INFLOWS IN INDIA: AN APPLICATION OF ARDL AND FMOLS

DYNAMICS OF FDI INFLOWS IN INDIA: AN APPLICATION OF ARDL AND FMOLS

The Influence Effect of Foreign Direct Investment on the Resource Mismatch in The Beijing-Tianjin-Hebei Region

In order to explore whether the continuous influx of foreign direct investment helps to improve the resource mismatch in the Beijing-Tianjin-Hebei region, this paper makes an empirical analysis of the data of the Beijing-Tianjin-Hebei region from 2003 to 2019, and finds that the inflow of FDI has a significant positive impact on the regional resource mismatch, especially the resource mismatch of capital factors. On this basis, a dynamic panel model was added to further verify the positive effect of FDI on improved capital mismatch. The study also found that the impact of foreign direct investment on resource mismatch in Beijing-Tianjin-Hebei region has very obvious regional heterogeneity, which shows the improvement effect of foreign direct investment on capital mismatch in Hebei region, but no obvious improvement effect on Beijing and Tianjin. Therefore, in order to further improve the Beijing-Tianjin-Hebei region resources mismatch, accelerate Hebei economic development to narrow the gap with the Beijing and Tianjin, increase and effective use of foreign direct investment is a favorable for economic high quality development, suggested that the government in the FDI inflow at the same time, strengthen the regional coordinated development, promote resource balanced allocation, improve the regional resource coordination and allocation, in order to realize the sustainable development of the Beijing-Tianjin-Hebei region as a whole.

Global trends in the investment policy of countries in agriculture in the context of transition towards renewable energy sources

Relevance. The renewable energy sector is attractive for foreign direct investment, among which projects related to the introduction of wind energy, as well as the reproduction of energy from biomass and biofuels are popular with investors. The proof of the popularity of such projects is the investment of 70% of all investments in renewable energy sources.The purpose The aim is to consider the trends of global investments in agriculture in the context of the transition to renewable energy sources.Objectives: to analyze the inflow of FDI to various regions of the world for the implementation of renewable energy transition projects; to show the reasons for the uneven investment of countries in different regions in modern conditions.Methodology. The structural theory is used to study investment flows, and the method of studying statistical reporting according to UNCTAD and CEPAL data is used for quantitative and qualitative analysis of attracted investments.Results. The statistical data used formed the basis for a quantitative and qualitative analysis of the directions of attracting FDI to various countries, showing the heterogeneity of this process by region. The global climate situation requires accelerating low-carbon innovation by all possible means. Developed countries have the same problems of transition to renewable energy as developing countries, so investment investments are relevant for agriculture in all regions of the world.Conclusions. Western countries prefer to be in the trend of the modern economy and invest in green sectors of the economy and those industries that use carbon-neutral technologies. Global changes in green energy financing related to the transfer of funds to the "hotbeds of conflict" in Ukraine and the Middle East have put some countries (LACs) in need of finding their own resources to continue energy transition projects.

Informal institutions’ influence on FDI flows: A configurational fsQCA analysis of corruption as part of the MNEs’ FDI motivation system

Previous research has emphasised the importance of examining institutional influences on FDI attractiveness. There is, however, relatively limited research with conflicting results exploring the relationship between informal institutional effects, such as level of corruption, and FDI motivation. Addressing this gap, we adopt a configurational fsQCA-based approach to link informal institutional influences to FDI motivation driving the presence or absence of FDI flows. Conceptualising corruption as bribery and unfair business practices, we extend our understanding of informal institutional quality impact on FDI inflows. Results reveal that informal institutional effects on FDI vary across regions, with several pathways explaining the presence or absence of FDI, according to the presence or absence of corruption. We add to previous studies by identifying the conditions that, when combined with corruption, are linked to the presence or absence of FDI. Results also indicate that whilst corruption appears unimportant in preventing FDI, and is of only secondary importance in driving FDI, it appears to have importance in determining the type of MNEs’ undertaking FDI. Overall, corruption is likely determining which companies invest in a country, rather than if, traditional reasons for FDI, particularly Resource and Market seeking, being key, with strategic and efficiency-seeking also being of secondary importance.

Editorial on Doing business in Africa: Navigating opportunities and challenges in Africa's emerging markets

This editorial delves into the evolving context of doing business in Africa, tracing its journey from being dubbed the “hopeless continent” to becoming a beacon of hope and opportunity. Drawing on a wealth of scholarly research, it highlights Africa's increasing attractiveness for global investments, underscored by rising FDI inflows and the emergence of a vibrant middle class. Despite these promising trends, the editorial also sheds light on the persistent challenges, including institutional fragility and political instability, coupled with limited representation in the existing international business discourse. We advance a more nuanced understanding of Africa's business environment, emphasizing the need for responsible growth, improved governance, and sustainable development. Thus, the Special Issue offers insights into the complexities and challenges of doing business in Africa, as well as the paradoxes and potential for fostering competitiveness and inclusive growth on the global stage.

Factors Influencing Foreign Direct Investment (Fdi) Inflows from West Asia/Middle East to Malaysia Between 2018 And 2023: A Qualitative Analysis from a Political Economic Perspective

Factors Influencing Foreign Direct Investment (Fdi) Inflows from West Asia/Middle East to Malaysia Between 2018 And 2023: A Qualitative Analysis from a Political Economic Perspective

Foreign Direct Investment Inflows into SAARC Countries: Trend Analysis

The study examines the relationship between institutional quality and FDI inflows in SAARC nations from 1981 to 2020. It employs Simple Linear and Semi log linear regression to draw conclusions. The findings indicate that corruption, political stability, government effectiveness, and GDP per capita have a positive and statistically significant influence on FDI inflows. The Semi log linear regression results show that all estimates of government effectiveness, GDP per capita, and trade openness are positive and statistically significant. This research suggests that institutional quality is important for the growth of FDI inflows. As a result, policymakers should prioritize effective institutional reforms to create a favorable investment environment and attract FDI inflows in SAARC countries.

FURTHER DISCUSSION ON INVESTMENT LAW, CYBERSECURITY LAW AND RECOMMENDATIONS FOR ATTRACTING FOREIGN INVESTMENT (FDI)

The purpose of this article is to present Further Discussion on Investment Law, Cybersecurity Law and Recommendations for Attracting Foreign Investment (FDI). Based on collects statisti-cal data from the statistical yearbooks of the provinces/cities from 2010 to 2021. We found FDI inflows have a positive impact on labor productivity in Vietnamese localities. Specifically, locali-ties have (i) the larger the proportion of FDI in progress in the total investment capital of the economy, (ii) the larger the number of projects, the more accumulated FDI in operation, (iii) FDI sector activity and (iv) the larger the share of net revenue of the FDI sector, the higher the labor productivity. Moreover, investors need to pay attention to cybersecurity law: Acts of distorting history, denying revolutionary achievements, and sabotaging the great unity bloc whole nation, offending religion, discriminating on gender, racial discrimination; Acts of spreading information harmful to organizations and individuals, including: false information causing confusion among the people, causing damage to socio-economic activities, causing difficulties for activities. actions of state agencies or official duty performers, infringing upon the lawful rights and interests of other agencies, organizations and individuals

Benefits of North Korea's Membership in the New York and ICSID Conventions

This article contends that North Korea should accede to the New York Convention and the ICSID Convention to provide more robust legal protections and dispute settlement mechanisms for foreign investors. While North Korea has enacted various domestic laws and established special economic zones to attract foreign investment, these measures have proved insufficient to fully assuage investor concerns, particularly regarding the enforcement of arbitral awards and protections against expropriation. Joining the New York Convention would mitigate uncertainties surrounding the enforcement of foreign arbitral awards by obligating North Korean courts to recognize and enforce such awards, subject only to limited, internationally accepted grounds for refusal. Accession to the ICSID Convention would enable aggrieved foreign investors to bring claims against North Korea before a neutral, depoliticized arbitral tribunal, providing an additional layer of protection against discriminatory or expropriatory state conduct. Membership in these conventions would significantly enhance North Korea's credibility in the eyes of foreign investors, demonstrating a commitment to upholding the rule of law and aligning its investment framework with global norms. While accession alone is not a panacea, it represents a crucial step toward building investor confidence, facilitating greater FDI inflows, and fostering North Korea's economic development and international engagement.