Direct Investment Inflows Research Articles

NATIONAL BRAND AS A TOOL FOR INCREASING THE GLOBAL COMPETITIVENESS OF THE COUNTRY IN THE INTERNATIONAL ENVIRONMENT

The article examines the national brand as a tool for increasing the country’s global competitiveness. The essential characteristics were studied and the category “national brand” was clarified. Its role and significance for the development of macroeconomic stability of the state are substantiated. On the global market, the national brand is one of the most important assets of any state, which helps to attract investments, tourist flows, personnel potential, improve the quality of labor resources, promote the increase in trade export-import operations, and strengthen the innovative component of the country’s development. Methodological approaches to rating assessment of national brands are considered. The dynamics of changes in the ranking of the top 10 national brands according to the Global Soft Power Index, as well as the position of Ukraine before and after full-scale military aggression, were studied. In order to determine the influence of the national brand on the level of global competitiveness of the country, the results of the rating of the Institute of Management Development (IMD) were analyzed according to four blocks of indicators: the state of the economy; government efficiency; business efficiency; the state of the infrastructure. Indicators that determine Ukraine’s low positions in international competitiveness ratings have been identified, namely: high level of corruption, low credit rating of the country, underdevelopment of the stock market, macroeconomic instability, high level of inflation, low level of health care on the quality of life of the population in general. It is substantiated that the creation of a strong national brand is a guarantee of sustainable economic development of Ukraine, which will also allow positioning the country as attractive for business, tourism and life. An increase in the rating of the country’s national brand will contribute to an increase in the inflow of direct investment, and a strong national brand significantly affects the perception of national corporate brands.

Factors Associated with Growth in India’s International Reserves: VECM Analysis

This study empirically examines the determinants of India’s international reserves in the long run and in the short run with seven other macroeconomic variables using the vector error correction model. The Johansen co-integration results indicate a positive long-run relationship between international reserves holdings and broad money M3 and foreign direct investment (FDI) inflows and negative relationship with external debt. The Granger causality test outcome also verifies the results, demonstrating that increase in broad money supply and FDI inflows are the reason for the accumulation in international reserves in India in the long run. M3 demonstrated a higher influence on international reserves suggesting that monetary policy is used widely in regulating the international reserves in India. This study also estimated the short-run dynamics and the tendency of the variables to reinstate to its long-run equilibrium. The error correction term coefficient entails a moderately low level of adjustment of international reserves holding, indicating that it is the other reason that the level of international reserves holding in India is high in the short run. JEL Codes: E51, F31, F41

Determinants of FDI Inflows: Bounds Testing Approach

Nowadays, heightened academic interest in foreign direct investment (FDI) inflows derives from a shift in host-country policymakers' perspectives on encouraging and attracting more FDI, which would generate possibilities and assist developing nations in achieving sustainable development. This study analyzes the determinants of FDI inflows in Sri Lanka using secondary data from 1978 to 2019. We used the Autoregressive Distributed Lag (ARDL) bound testing procedure to examine the long-run relationships between variables. The result revealed that the gross domestic product (GDP) growth rate positively affects FDI inflows to Sri Lanka. A higher GDP paves the way to higher market size, leading to more FDI in Sri Lanka. Openness to trade also positively impacts foreign FDI inflows into Sri Lanka, and this effect is statistically significant. It means that trade liberalization policies implemented since 1978 have increased FDI inflows into Sri Lanka. The exchange rate has a significantly positive impact on FDI inflows to Sri Lanka.

The Impact of China’s Belt and Road Initiative on Malaysia’s Construction Sector

The Belt and Road Initiative aims to connect Eurasia and Africa in several ways. To achieve its objectives, huge investment in the construction sectors, funded by China, in various participating countries is underway. Some megaprojects have achieved great success. However, dissenting voices concerning issues have been heard in participating countries. As such, this study aims to examine the impact of the BRI on Malaysia’s construction sector by identifying the long-run relationship between foreign direct investment (FDI) inflows from China to Malaysia and the development of Malaysia’s construction sector during the period 1991-2018 using the autoregressive distributed lag (ARDL) approach. The empirical results signify the positive impact of FDI inflows from China on the development of Malaysia’s construction sector. This finding suggests that Malaysia should continue to collaborate with China to develop and execute mega construction projects involving high-technology to stimulate the development of the construction sector and to sustain Malaysia’s long-run economic growth. A professional team should be formed in Malaysia to monitor the progress of each BRI-linked project to ensure the avoidance of debt traps and any loss of national sovereignty, as well as to ensure adherence to agreements.

Investigating the impacts of infrastructure on foreign direct investment in flow to Nigeria

Investigating the impacts of infrastructure on foreign direct investment in flow to Nigeria

The Nexus of Selected Macroeconomic Variables toward Foreign Direct Investment: Evidence from Indonesia

Foreign direct investment (FDI) inflows are a major instrument of economic growth in developing countries. Indonesia is one of the developing countries that has received more FDI with macroeconomic stability. The macroeconomic stability indicator is seen as an important factor in driving economic growth and attracting FDI inflows in Indonesia. Therefore, this study examines the relationship of selected macroeconomic variables toward the FDI in Indonesia over the period 1980-2019. Using Autoregressive Distributed Lag (ARDL), the empirical results showed that market size, domestic investment, government spending and foreign exchange rate are key factors influencing long-run FDI inflows. However, financial development revealed no relationship with FDI inflows in Indonesia. Overall findings indicated that macroeconomic variables influence FDI inflows. These findings guided policymakers in formulating new policies to ensure macroeconomic indicators' stability in driving economic growth.

FDI, ECONOMIC FREEDOM AND ECONOMIC GROWTH OF NIGERIA

This paper investigates Foreign Direct Investment, Economic Freedom and Economic Growth of Nigeria between 1995 and 2018. Specifically, the data on: Foreign Direct Investment (FDI) inflows, Economic Freedom (Aggregate index) and the data on real gross domestic product (RGDP) were used during the analysis. Time-series data were tested for stationarity using the Augmented Dickey-Fuller Unit Root test method. Vector Autoregressive (VAR) estimation method was adopted to examine the effect of FDI, Economic Freedom on Economic growth. The interactive effect of FDI and Economic Freedom on Economic growth was determined using regression analysis while Granger Causality test method was adopted for determining the causality relationship among the variables. The result of the Vector Autoregressive (VAR) suggests that both FDI and Economic freedom do not have a significant effect on economic growth in Nigeria. The result of regression analysis shows that the joint coefficient of both FDI and EF is negative and not significant. The result of Granger Causality revealed that there is a uni-directional relationship between RGDP and FDI and between EF and FDI respectively. The research recommends that the federal government of Nigeria should adopt appropriate foreign trade strategies to enhance the impact of FDI on economic growth in Nigeria.

Foreign direct investment and democratic survival: a sectoral approach

ABSTRACT How do foreign direct investment (FDI) inflows affect democratic survival? No study has examined how FDI influences the likelihood of democratic survival, although many studies have studied the effect of regime type on FDI inflows. The previous finding that FDI contributes to authoritarian survival and decreases prospects for democratization does not answer this question since determinants of democratic transitions are clearly distinct from those of democratic survival. I argue that FDI in non-primary sectors is more likely than FDI in primary sectors to contribute to democratic survival since non-primary FDI is likely to produce growth-enhancing effects through upstream and downstream linkages in the host economy and facilitate the diffusion of democratic ideas and norms originating from the West. To overcome the problem of the sectoral FDI data's poor coverage, I exploit an exogenous variation in FDI inflows by utilizing a country's geographical distance from developed economies. Using a sample of democracies from 1970 to 2010, I find that inward FDI, instrumented by market proximity to developed economies, is associated with an increased likelihood of democratic survival. The analysis of primary and non-primary FDI also provides supporting evidence.

An Economic Analysis of Foreign Direct Investment (FDI) Inflows in Indian Economy

An Economic Analysis of Foreign Direct Investment (FDI) Inflows in Indian Economy

INDIA’S ROLE IN KAZAKHSTAN’S MULTI-VECTOR FOREIGN POLICY

After the disintegration of the Soviet Union, Kazakhstan’s economy was weak since most of the industrial enterprises were located in Russia. To attain economic growth, Kazakhstan crafted a unique foreign policy known as the multi-vector foreign policy, which facilitated an easy inflow of direct foreign investments into the state economy. After economic liberalization in 1991, India took a serious interest in Central Asia, and since then the two nations have come a long way marked by complex interdependence in the international arena. They have demonstrated a successful and sustained upward trend in their bilateral relationship through soft power, trade and long-standing historical connections. Thus, the prospects of mutual cooperation between Central Asia, particularly Kazakhstan, and India are quite promising in the near future.

An analysis of international economic activities of Russian regions by means of virtual clustering

Subject. Today, the involvement of Russian regions in the world economy is becoming more and more important. Additionally, international economic relations of the regions have their own specific features determined by the level of the social and economic development of the region, its production capacities, infrastructure, the support of authorities and a number of other factors which need to be taken into account when developing the corresponding policies. Objectives. To classify Russian regions into groups with a similar level of development of various types of international economic activities and to identify their specific features. Methods. The following research methods were used to achieve the goal: a cluster analysis was used to group regions into virtual clusters; a comparative analysis was used to identify regions representing the specific features of the development of the relevant clusters; a correlation-regression analysis was used to detect and predict the dynamics of parameters of international economic activities of Russian regions. Results. As a result of processing original statistical data for 2018 for nine indicators, 81 Russian regions were grouped into five virtual clusters. The clusters were ranked according to the sums of standardised values of indices reflecting the level of development of international economic relations. The specific features of international economic activities of the clusters, their strengths and weaknesses, and representative regions were determined. Conclusions. It was found that Russian regions are strongly differentiated according to the level of the development of international economic relations. Since regions are focused on separate areas of international economic activity, it was possible to form 5 uniform virtual clusters. Cluster A (comprised of 3 regions) is focused on the international technology-based production with contributions from foreign funds. Its products are sold in the CIS countries and oversees. The most developed area of economic activity of cluster B (10 regions) is exports to the CIS countries. Cluster C (4 regions) is characterised by the extremely unbalanced development of the studied parameters. Its strengths include exports to foreign countries and the inflow of direct foreign investments. Among the relatively developed areas of international economic activities of cluster D are exports of goods abroad and imports of technologies and technical services. Cluster E (43 regions) is an outsider and does not have a pronounced focus on international economic activities. The weakest position for all five clusters is exports of technologies and technical services abroad.

CO2 emissions, export and foreign direct investment: Empirical evidence from Middle East and North Africa Region

This study aimed to investigate the relationship among CO2 emissions, exports of goods and services, and foreign direct investment (FDI) inflows in countries in the MENA region over the period 2002–2014. To that end, spatial panel simultaneous equations model based on the adjacency-based and distance-based weight matrices was used. The findings indicated that the results of spatial panel simultaneous equations with distance-based weight matrix were more fitting than those with adjacency-based weight matrix. The empirical findings approved a two-way linkage between CO2 emissions and exports and a one-way linkage between CO2 emissions and FDI inflows and also, between FDI inflows and exports. Furthermore, the existence of the spatial correlations among the CO2 emissions, exports and FDI inflows across countries was confirmed. It was further indicated that fossil fuel energy consumption was the main determinant of CO2 emissions, and accession to the WTO played a major role in enhancing exports and FDI inflows. The present study can provide new insights for policymakers and planners to not only consider the economic benefits of exporting goods and services and FDI inflows, but also attend their environmental impacts on local and neighboring countries.

Chinese Foreign Direct Investment and Human Rights in Kenya: A Mutually-Affirming Relationship?

Does the increase in Chinese foreign direct investment (FDI) inflows into Kenya portend doom for human rights in the country? The prominent narrative has been that FDI undermines human rights in host states, especially those in the developing world. This narrative is countered by claims that there exists a mutually affirming relationship between FDI and human rights. Proponents of this view posit that FDI facilitates the diffusion of human rights norms and correlates with the improved rule of law in host states. They also point to emerging human rights jurisprudence in international investment arbitration as evidence of a reciprocal relationship between FDI and human rights. In light of these arguments, this paper analyses the extent to which such a reciprocal relationship bears out between Chinese FDI and human rights in Kenya. It will be demonstrated that given the lack of a framework for human rights accountability for corporations at the international level, the restrictive treatment of human rights in international investment arbitration tribunals and weak institutional capacity in host states, a positive overlap between FDI and human rights is hardly a panacea for human rights protection in Kenya. Therefore, a synergy of legal measures and non-legal measures provide a pragmatic approach to insulate human rights from violations that may be associated with Chinese FDIs.

Interaction of GDP Growth Rate and FDI in Service Sector - Case of Croatia

Croatia is characterised by a foreign direct investment (FDI) inflow, mainly in the service sector, which is partly understandable owing to the country's orientation towards tourism. On the other hand, theoretical and empirical research indicates a weak impact of FDI in the service sector on the economic growth of the recipient country. Following the theoretical framework and critical analysis of previous research, the paper, on the example of Croatia in the period q1/2000 - q3/2020, uses the VAR model to analyse the mutual influence of GDP growth rate and FDI in the service sector. The results show that the impact of the GDP growth rate on the FDI inflow into the service sector is more significant and longer lasting than vice versa. The paper emphasises the importance of the adopted growth model for the type of FDI inflows into the recipient country, which in this case is characterised by the appreciation of the real exchange rate as an indicator of the country's competitiveness, whose impact on FDI inflow into the service sector is positive and long lasting.

Determinates of Foreign Direct Investment: An Empirical Study on India

Now a days, Foreign Direct Investment (FDI) is a buzz word for the developing countries not only to strengthen their Balance of Payment (BOP) account but also to accelerate overall economic growth of the countries. It also helps to generate employment in the country with new knowledge and knowhow. Naturally, it is very important for the policy makers of the respective countries to identify the key determinants which attracts more FDI and fine tune their policies to take comparative advantage in the competitive world. In this study the researchers tried to identify the important determinants of inflow FDI in Indian context. It is observed that some prominent determinants are existing to attract more FDI. However, government policies and restrictions are impediments to such inflow and these are regarded as moderating variables in this study. The statistical result also shows that services sectors and computer hardware and software are the significant areas where determinants of Foreign Direct Investment (FDI) inflows in Indian economy growth

Determinants Foreign Direct Investment (FDI) Inflow in ASEAN-8

Foreign Direct Investment (FDI) is the foreign investment which has more advantages than portfolio investment, because there are transfer of technology and transfer of knowledge. The purpose of this research is to analyze the effect of exchange rate, human capital, and economic growth on FDI inflows in ASEAN-8 period 2010-2019. By using panel data regression (FEM), the results showed that economic growth, human capital, and the exchange rate has a significant effect on FDI flows in ASEAN-8 countries.

Officials’ Turnover, Facial Appearance and FDI: Evidence from China

ABSTRACT Using the data of turnover of Chinese city-level Party secretaries and mayors over the period 2001–2016, this paper explores the impact of officials’ turnover on foreign direct investment (FDI) inflows. We further measure the facial attractiveness score of the new official according to their official photographs and investigate the role of facial appearance of official. The results indicate that turnover of a Party secretary does not show a significant impact on FDI inflows, but in the year of a mayor’s turnover, there are fewer FDI inflows and the effect is greater when the new mayor has a lower level of facial appearance. Moreover, the impact of mayors’ turnover and facial appearance only exists in regions with lower investor protection.

Relationship Between Central Bank Independence and Foreign Direct Investment Inflows

The principal objective of this paper is to scrutinize the relationship between central bank independence and foreign direct investment (FDI) inflows. The relevance of this goal is based on the results of recent studies, which indicate that the inflow of direct investment into the economy depends not only on its indicators of economic development, but also on the quality of the institutional environment. The study used a sample of 180 countries covering the period from 1970 to 2012 to model the relationship between the level of central bank independence and inflows of foreign direct investment. The primary method used in the study is linear panel regression with country-specific fixed effects. The results of the econometric modeling demonstrate that an increase in the central bank independence index has a statistically significant positive effect on the inflow of foreign investment. This result can serve as the basis for monetary policy reforms, particularly in developing countries since the expansion of the central bank's independence can become a factor in increasing the investment attractiveness of the economy.

ЭКОНОМИЧЕСКИЕ ОТНОШЕНИЯ ИНДИИ СО СТРАНАМИ ЮГО-ВОСТОЧНОЙ АЗИИ – ИНВЕСТИЦИОННЫЙ АСПЕКТ

The article argues that the investment aspect of India's economic relations with the countries of Southeast Asia is clearly inferior to the trade, but in recent years there has been a noticeable revival of the exchange of direct investments. First, this applies to the Southeast Asian countries, which are playing an increasingly significant role as investors in the Indian economy – the inflow of direct investment from Southeast Asian countries to India increased from 0.14 billion USD in 2000 to 15.15 billion USD in 2019 (they account for almost a third of total FDI inflows to India). The author cites the main competitive advantages of India that attract investors from Southeast Asian countries, and the relatively small and stable volume of Indian investments in Southeast Asian countries (no more than 2 billion USD per year) explains the relatively low competitiveness of Indian companies as investors in the markets of these countries.

How governance structure, terrorism, and internationalisation affect innovation? Evidence from Pakistan

ABSTRACT The existing studies on innovation extensively focused on such economic factors as foreign direct investment (FDI) inflows, trade openness, and R&D investments. Contrastingly, non-economic factors have received less research attention in the innovation literature. Lousy governance may lead to political and institutional ineffectiveness. Widespread corruption weakens the accountability practices and rule of law and may consequently hamper innovation. Similarly, terrorism deters flows of investment, increases unproductive costs, causes brain drains, decreases R&D investment and entrepreneurial activities and finally inhibits rates of innovation. This study empirically investigates the impacts of governance structure, terrorism, FDI inflows, and trade openness upon innovation in a laggard country: Pakistan. The findings via the ARDL co-integration approach show that lousy governance, terrorism and FDI inflows have adverse impacts on innovation. Trade openness positively influences innovation, but only in the long run. The results across several robust checks remain the same. Policy implications are also discussed.