Impact Of Foreign Direct Investment Research Articles

The role of renewable energy and foreign direct investment toward environmental degradation convergence to achieve sustainability: evidence from ASEAN countries

The role of renewable energy and foreign direct investment toward environmental degradation convergence to achieve sustainability: evidence from ASEAN countries

FDI impact: catalyzing digital capabilities in host nations

Purpose This study aims to investigate the impact of foreign direct investment (FDI) on national digital capability, specifically differentiating the impact between FDI greenfield and mergers and acquisitions (M&A). The research also investigates factors shaping digital capabilities, encompassing government transparency and absorptive capability, while exploring the mediating influence of absorptive capability in the FDI–digital capability relationship. Design/methodology/approach An econometric model has been developed to examine the interrelationship between national digital capability, FDI inflows, national absorptive capability and government transparency. The data set encompasses 55 countries over a period of nine years (2013–2021). National digital capability data is derived from the well-established index published by the World Competitive Centre (WCC). The sources of the explanatory variables align with standard practices, drawing from reputable institutions (UNCTAD and the World Bank, among others). Findings The findings reveal a significant positive impact of FDI, particularly in greenfield investments, on national digital capability. Government transparency and research and development (R&D) investment are crucial factors contributing to digital capabilities. Additionally, the absorptive capacity, reflected by R&D investment, also emerges as a potential moderating factor, influencing the impact of FDI inflows on digital capabilities. Practical implications The results recommend that policymakers and stakeholders should carefully consider the role of FDI, especially in greenfield investments, as a catalyst for enhancing national digital capability. The findings also underscore the significance of promoting government transparency and directing investments towards R&D to nurture digital capabilities. Moreover, understanding the mediating role of absorptive capability can inform strategies aimed at optimizing the impact of FDI on digital capabilities. Originality/value This study contributes uniquely to the existing literature by being the first to systematically explore the influence of FDI on national digital capability. Furthermore, it presents innovative empirical findings on the role of absorptive capability in enhancing the FDI impact on national digital capability, an area that remains relatively uncharted in current literature.

Sustainable Development: Impact of FDI and Corruption Mitigation Within BRI Nations

This study examines the effects of foreign direct investment (FDI), corruption mitigation, stock market, e-commerce and energy consumption on environmental quality in 54 countries along the Belt and Road Initiative (BRI) from 1996 to 2016. Using various econometric techniques, the study finds that anti-corruption efforts and financial development have positive impacts on environmental quality, while economic growth, FDI and urbanization have negative impacts. This study also reveals that FDI and corruption control have a significant interaction effect on CO2 emissions. This study provides important insights and policy implications for achieving sustainable development in BRI countries.

Foreign direct investment, information and communication technology, and economic growth: The case of North African Countries

This paper examines the role of information and communication technology (ICT) in modulating the effects of foreign direct investment (FDI) on economic growth in North Africa (Morocco, Algeria, Tunisia, and Egypt) over the period 1995 to 2021. Using advanced quantitative methods, including quantile regression, and comparing with Two-Stage Least Squares (2SLS) regression and Generalized Method of Moments (GMM), the study assesses the impact of FDI and ICT on growth, controlling for country fixed effects. The results indicate that FDI has a significant positive impact on growth, particularly when interacting with transmission channels, notably the telephone (mobile and fixed). However, the interaction with the internet varies according to quantile levels, showing positive effects at low quantiles and negative effects at high quantiles. The study highlights the importance of investment policies, digital inclusion, and research to optimize the benefits of FDI in the region.

“FDI AND ITS IMPACT IN INDIA”

A major factor in India's economic growth and development, foreign direct investment (FDI) is a game-changer. In this article, we take a look at how foreign direct investment (FDI) has affected different parts of India's economy and how it has affected things like job creation, technology transfer, and GDP growth. The paper explores the main factors that attract foreign direct investment (FDI) to India and the obstacles that stand in the way of this trend through an extensive analysis of previous research and empirical data. Keywords: Foreign Direct Investment, India, economic growth, employment, technology transfer

Investigating the crowding effect of FDI on domestic investments: Evidence from Bangladesh

This study empirically investigates the crowding effect of Foreign Direct Investment (FDI) on domestic investments in Bangladesh, utilizing annual time series data from 1972 to 2022. Initially, unit root tests are conducted with and without considering structural breaks in the dataset. This study employs the Johansen test of cointegration to investigate the enduring association between the variables and utilizes the Vector Error Correction Model (VECM) to accommodate this relationship over the long term. Following the estimation of the VECM, formulas about the magnitude of the crowding effect (CE) are applied to examine the impact of FDI on domestic investment in Bangladesh. Results indicate that FDI positively influences domestic investments in both the short and long run.

Impact of Foreign Direct Investment on Economic Growth — Case Study of the SEE Countries

Impact of Foreign Direct Investment on Economic Growth — Case Study of the SEE Countries

The Impact of Foreign Direct Investment, Green Technology Innovation and GDP on CO2 Emissions in Western China: A Static Panel Data Analysis

This study investigates the impact of FDI, green technology innovation and GDP on CO2 emissions in the western region of China. This study applies the extended STIRPAT model, selects the relevant data of nine provinces in western China from 2000 to 2019, applies the static panel data analysis method, compares and analyses the estimation methods of Pooled OLS, fixed effect and random effect, and finally adopts the robust standard error estimation method of fixed effect. The results of the robust standard error estimation indicate that, in addition to the negative impact of green technology innovation on CO2 emissions, CO2 emissions are positively impacted by FDI, GDP, population, and the proportion of the secondary and tertiary industries. Therefore, reasonable introduction of FDI and improving green technology innovation levels are crucial in reducing CO2 emissions in the western region of China.

The Impact of Financial Development on Renewable Energy Consumption: The Case of Vietnam and Other ASEAN Members

The purpose of this study was to evaluate the impact of financial development and renewable energy consumption in Vietnam and some selected countries in Southeast Asia. After researching over the period from 1970 to 2022, using quantitative analyses, including the ordinary least squares (OLS), fixed effects method (FEM), and random effects method (REM), and measuring the Driscoll–Kraay standard errors to assess cross-dependence between countries as well as a Dynamic Ordinary Least Squares (DOLS) estimation analysis to evaluate the robustness of the research, the research results confirm that financial development has a negative impact on renewable energy consumption, which reflects the important role of fossil energy sources in meeting energy consumption demand. Similarly, increased per capita income negatively affects renewable energy consumption. This study also confirms the positive impact of foreign direct investment on renewable energy use.

Foreign Direct Investment, Export and Economic Growth: An Evidence from Nepal

The aim of this paper is to analyze and evaluate the present status of foreign direct investment (FDI) in Nepal concentrating economic growth and export boost. Developing nations like Nepal derive significant advantages from foreign investment, fostering economic advancement through the attraction of external capital, entrepreneurial skills, expanding market spaces, and technology transfer. Nepal has witnessed an upsurge in FDI since the 1990s, primarily attributable to the implementation of liberal economic policies by the government. The enactment of the Foreign Investment Technology Transfer Act (FITTA) has further sustained the investment environment in Nepal. This paper analyzes and evaluates the role of FDI in driving Nepal's economic growth and export activities. Employing correlation analysis and an ordinary linear regression model, the impact of FDI on Gross Domestic Product (GDP) and exports is measured. Given the documented FDI inflows since the 1990s, this research concentrates on the period from 2010/11 to 2022/23 to measure FDI's impact. The findings of this investigation reveal a positive correlation between FDI, GDP and the country's export growth.

Foreign direct investment and employments in Asia Pacific nations: The moderating role of labor quality

This study analyzes the impact of Foreign Direct Investment and labor quality on employment in 29 Asia-Pacific nations from 1990 to 2020. We employ the Dynamic System Generalized Method of Moments to estimate the results. This study finds that a ten percent increase in Foreign Direct Investment creates an additional 0.890 % in employment, and a percent increase in labor quality increases employment by 0.0021 %. Our study also figures a moderating role of labor quality and FDI on employment in Asia Pacific countries. Our findings are robust before and after the recent financial crisis and alternative regression method. Finally, the findings are robust even if we employ an alternative estimation method. Our results are consistent with the Traditional FDI, the Neo-classical, and Resource-Based View theories. Our research generates practical policy implications to develop employment sustainably in Asia-Pacific nations.

Foreign direct investment on economic growth in Nepal: A sector specific analysis

This paper investigates the impact of Foreign Direct Investment (FDI) on the economic development of Nepal through a comprehensive and sector-specific analysis. With a growing interest in attracting foreign investments to foster economic growth, this study aims to provide nuanced insights into the diverse effects of FDI across various sectors in the context of Nepal. Utilizing a robust methodology that incorporates quantitative and qualitative approaches, the research examines key economic indicators and sectoral performance data over a specified period. This paper employs a sophisticated econometric framework that includes unit root tests to assess the stationarity properties of the time series data, ensuring the reliability of subsequent econometric models. The ECM and ARDL models facilitate the examination of both short-term and long-term dynamics between FDI and economic development variables, ARDL Bound test, is applied to investigate the existence of cointegration among the variables, providing insights into the long-term equilibrium relationship. Additionally, Granger causality tests are conducted to discern the directionality of causal relationships, helping to discern whether FDI leads to economic development or vice versa. The empirical results reveal compelling insights into the relationship between FDI and economic development in Nepal. Robustness checks further validate the reliability of the findings, enhancing the overall robustness and credibility of the study's empirical results. The comprehensive analysis provides valuable insights for policymakers and stakeholders aiming to formulate targeted strategies for fostering sustainable economic development in Nepal through FDI.

The Impact of Foreign Direct Investment on Tax Revenues in Six ASEAN Nations: A Dynamic Panel Data Model

The Impact of Foreign Direct Investment on Tax Revenues in Six ASEAN Nations: A Dynamic Panel Data Model

Factors affecting the green economy: the mediating role of foreign direct investment

PurposeThe objective of this study is to examine the various factors that exert an influence on the green economy. This study also investigates the impact of foreign direct investment (FDI) on the Malaysian economy, specifically focusing on its position as a mediator. This research also examines the correlation between FDI and its influence on the contemporary green economy.Design/methodology/approachThe authors employed quantitative methodologies and a self-administered survey to evaluate data and derive a definitive conclusion. The result was constructed using SPSS and SEM-PLS as the analytical software.FindingsThe study reveals that technological advancement, investment country and government policy significantly and positively affect the green economy, catalyse SDG goals and restructure the economy in better shape.Originality/valueThe current empirical research bridges the research gap in the context of technology advancement in government policy from emerging economies by exploring important factors, proposing their impact on the performance of the green economy, and empirically testing those hypothesized relationships. This study deciphers that FDI influences the green economy, where the investment country plays a significant role. Also, for a graphical presentation of this abstract, see the online appendix.

Impacts of Foreign Direct Investment on Economic Development: The Case of Thailand

Impacts of Foreign Direct Investment on Economic Development: The Case of Thailand

The mediating effect of economic factors and energy consumption between tourism and carbon emissions in ASEAN countries

This study aims to investigate the mediating effect of economic factors including Gross Domestic Product (GDP), and Foreign Direct Investment (FDI) and the energy factor represented by Energy Consumption (EC) on tourism, for which the International Tourism Receipts (ITR) and the carbon emissions (CO2) relationships of ASEAN Countries are proxies by employing panel data of ASEAN countries from 2000 to 2019. The results will be analyzed using the panel ARDL method. The study revealed that there was a relationship between the mediating effect of GDP and EC. However, there only EC partially mediated the impact of TP on CO2. Moreover, there was a long run relationship between TP and GDP, FDI and EC and the impact of TP GDP, FDI and EC on CO2 in the positive direction. To reduce the impact of tourism on CO2 emissions, governments in ASEAN countries may need to design policies that adopt the guidelines of Muslim countries.

Do FDI and foreign remittance inflows affect the unemployment rate? A new insight

This study aims to investigate the impact of FDI and foreign remittances on unemployment from 1991 to 2020 from Bangladesh's perspective. With the use of EViews 10 version, this study used the ARDL technique to capture the long-run and short-run estimations. The study utilized the unemployment rate as a dependent variable and foreign direct investment (FDI) and foreign remittances as independent factors. The remaining factors include exchange rate, GDP growth, exports, and inflation rate; these are controllable variables. The results of the research show that FDI and foreign remittance have a positive and statistically significant association with unemployment rate in Bangladesh, both in the long run and in the short term. Thus, according to the findings, FDI and foreign remittances are creating more unemployment in Bangladesh. Unlike the general economic theory, which states that the bidirectional relationship of FDI with the unemployment rate, as well as foreign remittances with the unemployment rate, is inverse, these research outcomes basically suggest that FDI and foreign remittance inflows are displacing domestic labor with, perhaps, a low-cost, highly skilled overseas workforce, and also indicate that there might be an increasing trend in the brown-field investment sector. For policy implications, this investigation lends support to the theory that Bangladesh should focus more and more on skilled development policies for domestic workers and create a sound environment for foreign investors in order to reduce the country's unemployment rate.

Greenfield investment and job creation in Ghana: a sectorial analysis and geopolitical implications of Chinese investments

Multinational investment has attracted mixed reactions from scholars and policymakers concerning their role and impact on job creation in host countries, particularly in developing economies. Using Ghana as a case study, this paper examines the impact of Greenfield investment on job creation. Proponents of multinational corporations (MNCs) argue that foreign direct investment (FDI) leads to economic growth, creates technological spillover, increases exports, and creates jobs, among other benefits. This has encouraged developing economies to adopt developmental strategies around MNC activities. Although most researchers have analyzed the impact of FDI on job creation, the unanswered question is: Does greenfield investment in Ghana lead to significant job creation in the formal sector? Extant literature considers FDI monolithic, without adequately differentiating between Green and Brownfield investments. Using granular data from the FDI Markets, this research paper fills this gap by empirically analyzing the Greenfield investment by 386 multinational companies in Ghana from 2003 to September 2020. Over the specified year range, these companies engaged in 500 projects across Ghana. Adopting the ordinary least square analysis (OLS), the study demonstrates that Greenfield investment has a statistically significant and positive impact on job creation in Ghana. Out of the 31 sectors, only the following sectors contribute significantly to job creation through Greenfield investment in Ghana: Consumer Products, Food & Beverage, Industrial Equipment, and Non-automotive transport OEM. This paper contributes to a better understanding of how government investment in fixed assets (GCF) such as roads, railways, and industrial buildings in the local economy should be managed efficiently so as not to spur inflation, which correlates negatively with jobs. Finally, this paper analyzes Chinese investments in Ghana, comparing them with U.S. investments, and examining their broader geopolitical implications, which highlights the importance of aligning foreign investments with national development strategies and adhering to international norms and standards.

Foreign Direct Investment and the Nigerian Economy: An Empirical Analysis

The primary motive of this paper was to investigate the impact of Foreign Direct Investment on economic growth of Nigeria from 1985 to 2022. Ex – post facto research design was carefully carried out; annual time series data were extracted from Central Bank of Nigeria Statistical Bulletin of 2021 and World Development Indicator. Real Gross Domestic Product (RGDP) was used as the dependent variable proxy for economic growth. Foreign Direct Investment (FDI), Exchange Rate (EXCR), Trade Openness (TOPN) and Inflation (INF) all denoted for explanatory variables of the study. The estimated coefficients of the variables under study displayed that all the variables are integrated of the same order 1(1) exception of Foreign Direct Investment which was integrated of order 1(0). The bound test conducted showed that there is proof of the presence of a long run correlation among the variables used while the causality test clearly showed that FDI granger causes economic growth in Nigeria under review. Other diagnostic tests seen in this paper are unit root test, descriptive statistics, correlation coefficient matrix, Cointegration test and test of Normality respectively, and they long-established the validity and reliability of the model used. Based on the inferential results revealed by the research work, the paper came up with recommendation that government should improve the investment climate for both domestic and foreign investors through adequate infrastructural development, soft loans and tax holidays.

Impact of Foreign Direct Investment (FDI) on Economic Growth: A Study of Brazil

Purpose: The aim of the study was to investigate the impact of foreign direct investment (FDI) on economic growth: a study of Brazil
 Methodology: This study adopted a desk methodology. A desk study research design is commonly known as secondary data collection. This is basically collecting data from existing resources preferably because of its low cost advantage as compared to a field research. Our current study looked into already published studies and reports as the data was easily accessed through online journals and libraries.
 Findings: The study on Foreign Direct Investment (FDI) and economic growth in Brazil found a positive relationship between FDI inflows and GDP growth. FDI contributes to capital accumulation, technology transfer, and sectoral diversification, enhancing competitiveness. However, the impact varies across regions and industries, with disparities in spillover effects. Targeted policies are needed to maximize FDI benefits and promote inclusive growth, addressing regional disparities and socio-economic inequalities.
 Unique Contribution to Theory, Practice and Policy: Dependency theory, modernization theory & institutional theory may be used to anchor future studies on the impact of foreign direct investment (FDI) on economic growth: a study of Brazil. The study should provide practical recommendations for firms and corporate boards to enhance their corporate governance practices based on empirical findings. The study should inform policymakers and regulatory authorities about the implications of corporate governance regulations on firm performance and market competitiveness.