FDI Inflows Research Articles

Towards the Operationalization of the AfCFTA Trade in Services Protocol: Do FDI and ICT Enable Trade in Services for ECOWAS Countries?

In January 2021, the AfCFTA entered its operational phase. This AfCFTA covers the liberalization of trade in services with a Protocol on Trade in Services. In this context, this paper examines the effects of FDI flows and ICT infrastructure on services exports, both globally and by sector in ECOWAS countries. We use panel data on the 15 countries for the period 1998 to 2020 and perform dynamic modeling using the LSDVC technique. The results reveal that the infrastructure ICT (internet and mobile telephony) does not directly affect services exports. However, overall, the interaction between ICT infrastructure and FDI positively and significantly influences services exports. The effects of the interaction between ICT and FDI have varying impacts on services exports across different sectors.

‘The Black Pit:’ Power and Pitfalls of Digital FDI and Cross-Border Data Flows

AbstractIn today's data-driven economy, data have been dubbed as the new oil. Hence, a close relationship is shared between the increasing amounts of international investments and the increasing volumes of cross-border data flows. The aim of this article is to discuss the legal aspects of the new data paradigm in the international economy and place this discussion in the larger framework of globalization and the Liberal International Order. The central thesis of the article revolves around the crucial role played by domestic laws in the fragmentation of international investment law. The article further discusses the interplay between national and international legal landscapes and how the changing nature of the Liberal International Order is affecting the flow of data across borders. In this context, it also discusses the issues that are presented by a lack of any comprehensive international framework governing Cross-Border Data Flows. The need to update existing agreements and laws in order to factor in digital investment is also highlighted.

Tax incentives, ease of doing business and inflows of FDI in Africa: Does governance matter?

Tax incentives, ease of doing business and inflows of FDI in Africa: Does governance matter?

Analysis of the Short and Long-run Effects of Macroeconomic Variables on Foreign Direct Investment Inflows to Tanzania

This study assessed the effect of macroeconomic variables on foreign direct investment inflows to Tanzania for the period 1970-2021. To do this, the time series data were analysed by the Co-integration test for the long-run relationship and the ECM model for the short- and long-run effects. The co-integration test suggests that there is a long-run relationship between government expenditure, inflation rate, external debt, interest rate, exchange rate, and foreign investment inflows. The results of the ECM reveal that government expenditure has a significant positive effect on short and long-run FDI inflows, while the inflation rate has a negative and statistically significant effect on short and long-run FDI inflows. Moreover, the interest rate, exchange rate and external debt variables have a negligible effect on FDI inflows. On the other hand, the proxy variable for government regime and economic reforms before 2015 revealed a positive and statistically significant effect on FDI inflows at 1% in the short run and 10% in the long run, while it had a negative and statistically insignificant impact on FDI inflows after 2015. The study recommends that the government should adequately allocate resources to economic activities to stimulate macro variables, which will attract more FDI and enhance steady economic growth in the short and long-run. Keywords: Macroeconomic Variables, Effects, Foreign Direct Investment, Inflows and Outflows, Tanzania. DOI: 10.7176/JESD/14-2-02 Publication date: January 31 st 2023

Impact Of Covid 19 On Fdi Inflow In India In Green Energy

This research fills a gap in the current literature on the variables that impact foreign direct investment (FDI) in India's green energy sector. This study investigates the impact of COVID 19 on foreign direct investment (FDI) in India's green energy industry. The duration of the pandemic and the vaccination pace are the major apprehensions that affected the recovery of most industries. The FDI inflows also kept fluctuating during Covid 19. India's institutional structure is more essential in attracting foreign direct investment in green energy projects than the country's macroeconomic or environmental aspects. To attract foreign direct investment in the broader economy, variables like economic growth and access to local funding are necessary for FDI. The impact of Covid 19 on FDI inflows into the green energy sector in India is significant because it sheds light on the difficulties the industry faces, identifies potential solutions to those problems, and contributes to the country's continued leadership in the field of renewable energy.

FDI During the First Covid-19 Year in a Developing Country

This study addresses the FDI flows into developing countries during the first COVID-19 pandemic year, regarding their resilience countries or not. From a realistic perspective, unlike previous crises, the Covid-19 pandemic is a health crisis affecting all of society, and secondly an economic crisis. We Used the percentage change in FDI flows between 2018-2019, and 2020 and other explaining indicators to illustrate the effects. the results revealed Covid-19 has affected FDI flows into developing countries severely by negatively affecting FDI flows to you through indices. Infrastructure, education, export, and death rate. In contrast, the positive impact on GDP, the workforce, openness, and trade in services. In terms of countries, the effects of Covid-19 are negative in terms of FDI flows in Asian countries, led by Macao while India and China resisted steadfastly as China focused on IT industries, while India focused on digital investment. The most vulnerable is Africa, which relies on FDI for its growth and development, despite Africa's lag in foreign direct investment flows, while the Central African region resisted due to oil exports, as well as Senegal due to investments in energy in 2020. Finally, the state of weakness also extended to a large extent, Latin American countries appear to have had a history of grappling with structural development challenges before the onset of the pandemic, adding to its impact. Keywords: FDI, Covid-19, developing countries DOI: 10.7176/EJBM/15-2-01 Publication date: January 31 st 2023

DETERMINING FDI INFLOWS IN INDIA: USING BOX-JENKINS ARIMA APPROACH

Using time series data for FDI inflow in India from 1991 to 2021, the study seeks to model and predict the FDI inflows in India. The Autoregressive integrated moving average (ARIMA) model created by Box and Jenkins (1976) was utilised to develop the model. Identification of the UBJ included determining the appropriate AR (autoregressive) and MA (moving-average) polynomial orders, i.e., p and q values. The rankings were used to determine the stationary series' autocorrelation and partial autocorrelation functions. It was determined that FDI data were not static and that a single-order difference was sufficient to create the required stationary series. The study identified a low BIC value and then proposed the ARIMA model (0,1,2) as an appropriate FDI predictor in India. The expected FDI inflows for 2022–23 through 2029-2030 were within the confidence interval. The percentage variation between predicted and observed numbers assures that our forecast prices are near actual prices.

Direct Foreign Investment in the Central and Eastern European Countries in the Period of Political and Economical Destabilization

Goal – the main research query of the article regards whether the tendencies and mobility in the sphere of the FDI inflow to the CCEEs changed, in the existing conditions of the political and economic instability. Therefore, the purpose of the article is to evaluate the changes in the FDI level, dynamics and structure in the CCEEs in the conditions of geopolitical uncertainty resulting from the outbreak of the war in Ukraine, in comparison with the tendencies in the previous years. Research methodology – the first part of the article contains the analysis of the overview of the literature on the FDI conditioning in the CCEEs (the Czech Republic, Estonia, Hungary, Lithuania, Latvia, Poland, Slovakia and Slovenia) and the evaluation of the investment attractiveness in the light of the selected factors. The next part contains the analyses concerning the capital inflow in the form of FDI to the CCEEs which included the data regarding the FDI resources, the FDI recourses per capita, FDI inflow, including the number and value of greenfield investments. The analysed period covers the years 2012–2022. Score/results – when analysing the basic macroeconomic indicators characterising the economic conditions of CCEEs, it may be stated that those countries follow an economic development path where FDI has an important role. The inflow of foreign direct investment played a crucial role both in the transformation process of CCEEs’ economies and also influences their modernisation and development now. Originality/value – considerations and analyses conducted in the article allow to claim that geopolitical destabilisation affected the economies of the CCEEs, including the inflow of capital in the form of FDI, in two ways. On the one hand, it may be observed that those countries, as well as other countries in Europe, experienced deterioration of the economic conditions. Lower dynamics of the GDP growth and high inflation are typical problems of the analysed economies. However, despite that, the investment attractiveness of those countries remains high. The analysed economies constitute attractive locations for foreign investment, which is confirmed by the growing FDI inflow, the growing value of FDI per capita, or the growing value of greenfield projects.

ДИНАМІКА І СТРУКТУРА ГЛОБАЛЬНИХ ПОТОКІВ ПРЯМИХ ІНОЗЕМНИХ ІНВЕСТИЦІЙ

The article examines the inflow of foreign direct investment around the world, distinguishing different groups of countries. It was found that global FDI flows tend to increase in all regions of the world, despite the difficult year 2020 – the period of COVID-19, with a significant decrease in developed countries. The countries of Europe and North America contributed the most to the global decline in FDI: more than 100% and 46%, respectively. However, the decline was very uneven across regions, with Latin America and the Caribbean down 37%, Africa down 18% and developing Asia down 4%. FDI in countries with transition economies decreased by 77% compared to 2019 to $13 billion. USA. After a significant recovery in 2021, global foreign direct investment fell by 12% in 2022 to $1.3 trillion. The reason for this was the global crises that overlapped each other during a certain period of time. The decline was felt mainly in advanced economies, where FDI fell by 37% to $378 billion. We find that despite a slowdown in global FDI flows in 2022, new investment showed moderate growth. In the member countries of the Organization for Economic Cooperation and Development, FDI inflows fell by 26%, the main reason was the withdrawal of investments from Luxembourg (with the exception of Luxembourg, FDI flows in 27 European countries increased by 22%). However, this decline was partially offset by strong growth in Switzerland as well as the United Kingdom. Consequently, FDI flows to the United States decreased by 21% in 2022 and increased in other countries, including Australia, Italy and Sweden. If we single out some regions, we can conclude that the inflow of direct foreign investment to the G20 countries has decreased by 15%. While they increased by 7% in the G20 OECD countries, FDI fell by 38% in the non-OECD G20 countries, mainly due to declines in China and to a lesser extent in South Africa, compared to their peaks levels recorded in 2021. Foreign direct investment flows in Brazil increased by 68%. According to the UNCTAD World Investment Report 2023, most economies in the region have recovered FDI inflows and only a few have experienced a downturn. The largest recipients of foreign direct invest- ment in the first quarter of 2023 were the USA, Brazil and China. The main sources of FDI outflows around the world were the United States of America, Germany and China.

Effect of COVID-19 pandemic on the inflow of FDI into Indian economy

Covid-19 has battered the global economy causing the worst recession since The Great Depression of the 1930s. By the end of 2020, the worlds GDP maybe about 7.5% lower than it would have been without the pandemic. Globally more than 15% of the young people who were in work before the Covid-19 have lost their jobs. Widespread lockdowns have caused changes that were already affecting the world economy in technology, finance and trade. With great deal of uncertainty in the transactional space, investors are now more cautious before making any making any significant transactions. Global FDI flows fell by more than 49% in the first half of 2020 and even under the most optimistic scenario after the economic support policy measures by the governments, the numbers don’t seem to be getting better. The developing countries are hit even worse because the sectors attracting the largest shares of FDI such as primary and manufacturing sectors are hit the worst. FDI being a critical driver of the economic growth could play an important role in supporting the economies during and after the crisis.

The determinants of issuing central bank digital currencies

Central Bank Digital Currencies (CBDC) are considered ‘digital fiat currencies’ that do not have a physical form, which is a key distinction from conventional fiat money. This study aims to identify factors that influence central banks’ decisions in taking advanced actions to issue CBDC, namely, the economic, market, demographic and technical factors. Data is collected from the CBDC Tracker and the WB database for the period 2013–2021. We applied the Pooled OLS estimations to examine the impact of the key factors on being in an advanced stage for issuing CBDC; moreover, probit and logistic regression are employed to robust our results and overcome the limitations of Pooled OLS. The findings demonstrate that underdeveloped economies are more engaged in issuing CBDC. Besides, better regulations, FDI inflow, young populations, and more urban societies would increase the probability of CBDC issuance. Nevertheless, results show the impact of technical factors is heterogeneous across countries.

Do exogenous factors matter in the productivity growth trajectory of Indian manufacturing

The study tries to present total factor productivity growth in Indian manufacturing sector to identify the exogenous factors that led to the growth of productivity in manufacturing sector during 1996-1997 to 2016-2017. Using GMM estimation, the study reveals that FDI inflow, political stability, initial education, research and development expenditure are found to positively impact productivity growth in Indian manufacturing. Trade openness yields adverse impact on TFPG. Female participation and initial investment unexpectedly caused negative impact on TFPG. Negative impact of per capita GDP on TFPG, although insignificant, suggests that economic growth in India is mainly input accumulated rather than productivity driven. Sectoral composition having insignificant negative impact indicates that predominance of agricultural sector would lower productivity growth in manufacturing sector of India. With input accumulated growth prevalent in India, improving TFPG is an urgent need in order to reduce dependence on physical inputs as well to become a productivity driven economy.

The Enabling Environment for Official Development Assistance and FDI Inflows: An Empirical Evidence from Djibouti

The Enabling Environment for Official Development Assistance and FDI Inflows: An Empirical Evidence from Djibouti

The Flourishing Economic and Political Relations of Turkey & Azerbaijan: An Overview after 30th Diplomatic Anniversary

Turkey was the first country to recognize the Azerbaijan’s independence from Soviet Union on 9th of November, 1991. Turkey-Azerbaijan bilateral relations are rooted in their historic cultural analogy and geopolitical features which have always fostered the mutual support for industrial, economic, and technological development. Turkey’s foreign policy has evolved with the changing dynamics of international relations for promoting cordial bilateral ties with Azerbaijan. Bilateral trade between these countries has provided a solid foundation for reciprocity and preliminaries for maintaining the balance. The primary catalyst of the trade growth trajectory in Azerbaijan has been the earning from energy resources but the role of Azerbaijan’s FDI inflows in Turkey has also been a strategic calculus in its flourishing trade. To date, the ties between Turkey and Azerbaijan have remained cordial, however, according to economists and international relations professionals, the relationship has undergone qualitative changes. In this study, an in-depth analysis of the bilateral relations between Turkey and Azerbaijan has been conducted to identify the trajectory of evolution, success indicators, and the associated challenges.

THE IMPACT OF CORONA VIRUS ON THE GLOBAL ECONOMY IN SELECTED COUNTRIES

We are facing a global health crisis unlike any crisis in the history of 100 years, a crisis that kills people, spreads human suffering and changes people's lives, but this is much more than just a health crisis, it is a humanitarian, economic and social crisis. The coronavirus disease (COVID-19), which the World Health Organization has described as a pandemic, is attacking societies at its core. And the United Nations explained that the global economy may shrink by up to 1 percent in 2020 due to the Corona virus pandemic, a reflection of the previous prediction of 2.5 percent growth, warning that it may contract more if the restrictions imposed on economic activities. Stretched without adequate financial responses. The COVOD-19 pandemic will cause a significant reduction in FDI inflows. Multinational corporations, local business and investment have been hit hard with far-reaching social and economic repercussions. The coronavirus crisis is primarily a public health threat, but it is also increasingly an economic threat. The so-called "Covid-19" shock will lead to recession in some countries and a slowdown in global annual growth to less than 2.5 percent - often seen as a recession threshold for the global economy, so this study looks to highlight the impact of this crisis on The world's economic and political fields as a serious attempt to find a real and expected comparison of this crisis

Foreign direct investment and macroeconomic factors: evidence from Indian economy

The World Investment Report for 2017 released by UNCTAD projected that FDI inflows to developing Asian countries will increase by 15% in 2017, to $515 billion. With a boost in investor confidence in the economic outlook in major Asian economies, India is the second most preferred destination in the world as regards FDI inflows. This paper examines the relationship between FDI and macroeconomic factors, like, GDP, FER, employment, exports, and GCF for the period 1978-1979 to 2016-2017. Techniques like augmented Dickey-Fuller test, multivariate regression analysis Johansen's co-integration test, impulse response analysis and Chow breakpoint test, multiple breakpoint test and Bai-Perron sequentially determined breaks test are used. The findings suggest that there is a significant correlation between FDI and the macroeconomic factors. The results of Johansen's co-integration test reveal that there is a long run causal relationship between FDI and other variables.

Nexus between Ease of Doing Business and Foreign Direct Investment: Evidence from 130 Economies

Based on both yearly data of 130 economies, this paper studies the association between the ease of doing business and FDI from three characteristics, i.e., internationalization, legalization, and facilitation. The results demonstrate that the ease of doing business and its three characteristics, i.e., internationalization, legalization, and facilitation all have a statistical positive influence in attracting FDI inflows. Second, this paper finds that in the legalization of doing business, the resolving insolvency indicator is the most statistically positive on attracting FDI, and in the facilitation of doing business, the paying taxes indicator plays an essential role in attracting FDI. Third, this paper finds that the ease of doing business has a vital impact on FDI inflows in developing countries, but not significant for developed countries. The implications of this paper are helpful for local governments optimizing their business environment to attract FDI.

A Study on Regional Inequality in FDI Inflows into the Indian States

A Study on Regional Inequality in FDI Inflows into the Indian States

A comprehensive analysis of global foreign direct investment trends: insights into sectoral patterns and regional distribution

This article provides a concise analysis of global foreign direct investment trends from 1990 to 2021. Drawing from authoritative reports, the study highlights the general changes in FDI flows over the period and examines their distribution by region and industry. The findings offer valuable insights into investment behavior, aiding policymakers and businesses in enhancing global investment strategies for sustainable economic growth.

Foreign Direct Investment in Less Developed Countries: Do Institutions Still Matter? Evidence for Central African Countries

This paper analyses the FDI flows determinants in less developed countries with evidence in Central African countries. We mention that if institutions matter in attracting FDI flows; this is not only due to good institutions or political regime types as focused in economic literature but also due to economic sectors which must be considered as investors decision procedure.