Investment Flows Research Articles

The existence of modern stores and legal protection for traders in the people's market in Badung regency, Bali

The influx of investment in the trade sector has given rise to large-scale economic power that can not only increase and encourage economic growth, but also cause negative impacts such as unhealthy business competition between traditional markets and modern stores. If this competition is left unchecked, it will result in the displacement of the existence of traditional markets as weaker economic actors. Therefore, the arrangement and guidance carried out through policies taken by the government must be seen from a synergistic perspective for both business actors. Based on the background of the problems that have been described above, several problems can be formulated as follows: 1) How is the implementation Badung Regency Regulation, Bali Number 3 of 2017 on business competition between modern shops and traditional markets? 2) How is the role of the Badung Regency government, Bali in providing legal protection for traditional markets from the rampant existence of modern shops? The type of research in writing this scientific paper is an empirical legal research type, which is used because there is a gap between what is regulated in the Law and its practice. The implementation of Badung Regency Regulation, Bali Number 3 of 2017 has not been effective because of the non-compliance of modern shops in fulfilling the completeness of the permits and not heeding the rules that have been set as well as the indecisiveness of law enforcement officers in providing a deterrent effect. Legal protection carried out by the Badung Regency Government, Bali is felt to be less than optimal because it is more directed at preventive legal protection, namely only in the form of prevention before violations occur, by providing guidance and socialization to traditional market and modern shop business actors.

Impact of investment climate on foreign direct investment in Nigeria, Ghana, Kenya and South Africa,

The study examined the Impact of Investment Climate on Foreign Direct Investment in Nigeria, Ghana, Kenya and South Africa, for the period of 2000 to 2021. The focus of this study is on how the business environment in Nigeria, Ghana, Kenya and South Africa influences foreign direct investment. Specific goals are as follows: (i). Evaluate critically the effect of the economic investment climate in Nigeria, Ghana, Kenya and South Africa on the inflow of FDI The variable scope include economic investment climate (ease of doing business index, gross domestic product, inflation rate), political investment climate (political stability index, corruption perception index, quality of institutions), environmental investment climate (nitrous-oxide emission, population density, land/air pollution rate) as the independent variable. The dependent variable was foreign direct investment inflows. Time series analysis, and more specifically the multiple panel regression analysis method, was used in analyzing the data adopting the Cobb Douglass model for its theoretical framework and data was sourced from the Statistical Bulletin of the countries studied and the World Bank Statistics.\The results show that, Economic investment climate variable (GDP) had significant positive effect on the inflow of foreign direct investment into Nigeria, Ghana, Kenya and South Africa. While inflation have positive insignificant relationship with FDI; It was recommended that; Efforts should be made by the governments of Nigeria, Ghana, Kenya and South Africa to enhance their economic fortunes by strengthening their economy through engaging in massive production for exports which will boost economic growth and as well attract more foreign direct investment

The impact of credit ratings on international investment: Evidence from an emerging market

This study examines the influence of sovereign credit ratings on international investments in emerging markets, focusing on Foreign Direct Investment (FDI) and Foreign Portfolio Investment (FPI). Using data from 22 emerging economies spanning 1999 to 2019, we employ OLS and fixed-effects regression models to analyze how credit ratings affect investment flows and market volatility. The findings indicate that sovereign credit ratings significantly impact investor decisions, as these ratings serve as a key metric in assessing investment risk and potential. This research highlights the essential role of credit ratings in enhancing financial stability and promoting economic integration through foreign investments, with implications for growth and trade. The study provides novel insights for investors, policymakers, and rating agencies on the role of credit ratings in emerging market investments, contributing to a deeper understanding of their impact on global economic dynamics.

The limits of diplomacy by treaty: Evidence from China's bilateral investment treaty program

AbstractThe web of over 3000 Bilateral Investment Treaties (“BITs”) is the primary body of international law regulating cross‐border investments. Research suggests that these treaties may have had a limited impact on promoting new investments, but that they still may have helped to improve countries' political relationships. In this paper, we document that this pattern was reversed for one of the most prolific signers of BITs: China. Using a stacked‐event research design, we find that Chinese BITs are associated with an increase in Bilateral Foreign Direct Investment Flows but a divergence in voting patterns at the United Nations. We then explore two explanations for why the Chinese BIT program led to increased investment while also producing foreign policy divergence: that the domestic political costs of economic engagement with China push countries away, and that there are offsetting international pressures that have stronger pulls than China's efforts. We find no support for the domestic political costs explanation, but we do find evidence that the countries that received increased aid from the United States after signing a Chinese BIT had greater foreign policy divergence with China.

Is the country’s preparedness for epidemics and pandemics an FDI location factor? An empirical analysis using panel data

Purpose This study aims to validate the hypothesis that a country’s preparedness for epidemics and pandemics, as measured by the GHS Index, significantly influences inward FDI inflows. By examining panel data from 2019 to 2021, the research seeks to elucidate the impact of heightened epidemic and pandemic preparedness on investment behavior, thereby highlighting the importance of health resilience and preparedness in attracting foreign investment and fostering economic growth and development. Design/methodology/approach The study uses panel data spanning 181 countries from 2019 to 2021 and uses logarithmic regression models to analyze the impact of a country’s preparedness for epidemics and pandemics, as measured by the Global Health Security (GHS) Index, on inward Foreign Direct Investment (FDI) inflows. Auxiliary variables including GDP, labor supply, openness rate, inflation rate and political stability are incorporated. Robust weighted least squares estimation techniques are used to account for potential heterogeneity and panel data characteristics. Findings The study reveals a consistent and statistically significant positive relationship between a country’s GHS score and inward FDI, indicating that destinations with robust health systems are more attractive to investors. Higher GHS scores correlate with reduced investment risk, improved business continuity during health crises and enhanced health-care infrastructure, leading to a healthier and more productive workforce. Research limitations/implications While the study provides valuable insights into the relationship between epidemic and pandemic preparedness and inward FDI inflows, several limitations exist. The analysis relies on cross-sectional data from a relatively short timeframe (2019–2021), limiting the ability to capture long-term effects. Additionally, the study focuses on the GHS Index as a measure of preparedness, overlooking other potential determinants of FDI attractiveness. Future research could explore a broader range of health security indicators and incorporate longer-term data to provide a more comprehensive understanding of the relationship. Originality/value This study contributes to the literature by examining the previously underexplored relationship between a country’s epidemic and pandemic preparedness, as measured by the GHS Index and inward FDI inflows. By using panel data analysis and robust econometric techniques, the research provides empirical evidence supporting the positive impact of robust health systems on FDI attractiveness. The findings underscore the importance of prioritizing public health initiatives and epidemic preparedness as integral components of attracting and retaining foreign investment, thereby fostering economic resilience and sustainable development in host countries.

The Relationship between Democracy and Foreign Direct Investment in East Asia

Has progress toward democracy affected the level of foreign direct investment (FDI) inflows to East Asia? Existing research presents conflicting theoretical perspectives on the effect of democratic institutions on FDI. One thread suggests that democratization will lead to more FDI inflows; a second argues for less; and a third argues there may be no effect. We explore whether political institutions impact FDI flows to East Asia by empirically assessing the relationship between the two phenomena. Using three-stage least-squares estimation to account for endogeneity and pooled annual time-series data from 1975 to 2018 for 13 East Asian countries, we find that democratic institutions are associated with higher levels of inward FDI. The results are robust across alternative measures of FDI and democracy. We conclude with a discussion of policy implications.

The Impact of GDP Growth on Foreign Direct Investment: An Analytical Study

This study explores the relationship between Gross Domestic Product (GDP) growth and Foreign Direct Investment (FDI) inflows in developing economies. As FDI plays a pivotal role in driving economic progress, understanding its dynamics relative to GDP growth provides valuable insights for policymakers and investors. The manufacturing sector, with its need for cost efficiency, production scale, and infrastructure, attracts FDI when GDP growth fosters these elements. Conversely, the services sector, which relies on skilled labour and technology, benefits from rising GDP, fuelling local demand for services. This research uses historical data, descriptive statistics, and regression analyses to evaluate GDP's impact on FDI from 1970 to 2023. The findings reveal a positive correlation between GDP growth and FDI inflows, with distinct sectoral variations that highlight specific economic demands in manufacturing versus services. The study’s conclusions aim to guide targeted policies for fostering sectoral FDI, supporting balanced and sustainable economic development.

Political Turbulence and its Impact on Foreign Direct Investment Inflows in some selected African countries

This work examined the political turbulence and its impact on Foreign Direct Investment inflow on some selected African countries; Nigeria, Ghana, Kenya and South Africa. The aim is to determine how the political climate in Nigeria, Ghana, Kenya and South Africa affects the inflow of foreign direct investment. The modified Cobb Douglass model was the theoretical underpinning of the study since growth in FDI is likened to output and the factors that lead to growth are the investment climate variables. Using the panel ARDL model analysis, the following findings were made: Political investment climate variable (PSI) had significant positive effect on the inflow of foreign direct investment in Nigeria, Ghana, Kenya and South Africa. The result showed that Political investment climate variables (political stability and corruption index) exerted significant negative effects on the inflow of foreign direct investment into Nigeria, Ghana, Kenya and South Africa. It was recommended that; Efforts should be made by the governments of Nigeria, Ghana, Kenya and South Africa to enhance their economic fortunes by strengthening their economy through prioritizing political stability and addressing underlying causes of political unrest, corruption, weak institution and political social inequality. As well as engaging in massive production for exports which will boost economic growth and attract more foreign direct investment.

Measuring the Non-linear Effect of Chinese Investment Flows on the Sustainable Environment of BRI Countries: Evidence from the Lens of Asymmetric Approaches

Measuring the Non-linear Effect of Chinese Investment Flows on the Sustainable Environment of BRI Countries: Evidence from the Lens of Asymmetric Approaches

FDI Impact on China's Sectoral Performance: A Panel Cointegration and Causality Analysis

This study provides a thorough examine the influence of FDI inflows and outflows on China's economic growth across three major sectors. Using panel data from 1997 to 2022 in China, it utilizes tests for unit roots and cointegration to investigate the enduring connection between FDI and economic growth. The research results validate the existence of a long-standing cointegration relationship between FDI and economic expansion. Additionally, this research employs the Granger causality test to ascertain the direction of causality between FDI and economic growth. The study reveals a two-way causality between foreign direct investment (FDI) inflows and overall economic growth, which supports the hypothesis of feedback causality. Additionally, there exists a one-way causality originating from FDI inflows across various sectors, suggesting that growth attracts FDI. The government should encourage foreign investment to enhance the industrial structure and boost economic growth.

Foreign direct investment inflow and the economic growth nexus in Tanzania

PurposeA shortage of investment capital is one of the main issues facing most developing economies, including Tanzania. Policymakers, economists, and governments in these countries have been debating how to overcome this obstacle and improve economic growth through foreign direct investments (FDI). The present study endeavors to examine the relationship between FDI and economic growth in Tanzania during the period of 1991–2021. The analysis considers financial development, capital formation, and labor force involvement as intermediation variables.Design/methodology/approachThe study uses time series data to estimate an autoregressive distributed lag (ARDL) model, as well as Granger causality tests to investigate the relationship between the variables under study.FindingsThe findings show a long-run co-integration between the studied variables. However, only FDI and labor input have a significant impact on gross domestic product (GDP) growth in both the short and long run. Bidirectional causality exists between FDI, labor input, and GDP growth in the short and long run.Practical implicationsThis study contributes to an understanding of the relationship between inbound FDI, labor input, and economic growth in Tanzania, as well as updating the government to improve its financial system to gain more from FDI inflows and hence boost growth-enhancing effects.Originality/valueThis study provides insight into the relationship between inbound FDI and economic growth in Tanzania, which is a critical policy concern in developing economies. Extant studies’ results remain controversial, and this is the first study in Tanzania to investigate the FDI-growth nexus, by considering financial development, capital formation, and labor input simultaneously.

The Determining Factors of Foreign Direct Investment: The Case of Turkiye

Direct investments are an important dynamic for sustainable economic growth and development. Especially developing countries need foreign capital more because their income and savings are not sufficient. Foreign direct investment is becoming increasingly important for sustainable development and stable growth. In Turkiye, national savings are not sufficient to realize investments. In order to increase foreign direct investment inflows, macroeconomic dynamics should be favorable. Therefore, determining the relationship between foreign direct investments and macroeconomic factors will make it more possible to monitor foreign investments. The aim of this study is to determine the determinants of foreign direct investments in Turkiye. In this context, exchange rate, CBRT reserves, inflation, economic growth rate and external debt data are used in this study. The study utilizes annual data for the period 1981-2021. The ARDL bounds test was used in the analysis. Findings show that exchange rate, economic growth and foreign debt are determinants of foreign direct investment.

Do the Migrant Workers’ Remittances foster Economic Growth in the South Asian Countries? A Panel Analysis

The purpose of this study is to investigate the effect of migrant workers’ remittances on economic growth in South Asian countries using panel data from 1980 to 2020, resulting in 123 observations. I consider here the top three remittance-receiving countries in South Asia, namely Bangladesh, India, and Pakistan. The growth model is estimated using pooled ordinary least squares (OLS), fixed-effects, and random-effects approaches. The empirical results did not support the hypothesis and it indicates that migrant workers’ remittances inflow growth does not lead to growth in the three South Asian countries based on the fixed-effects method since the random-effects model is rejected in statistical tests. The analysis suggests that a 1% increase in growth of remittance inflows decreases the economic growth by approximately 1.1%, and a 1% increase in foreign direct investment inflow decreases the economic growth of sample countries by roughly 0.14%. The regression results also indicate a positive impact of trade openness on economic growth. Additionally, the study shows no significant relationship between inflation and economic progress.

Assessment of the oil and gas potential of the eastern edge of the Northern Ustyurt using new geophysical data

Purpose. Detailed substantiation of the geological structure of the eastern edge of the Northern Ustyurt, clarification of modern geological and geophysical data, as well as highlighting the mainstages of evaluating the results of exploration work to confirm the oil and gas potential and subsequent exploitation of the fields. Methodology. The authors used the following scientific methods: generalization – to systematize scientific provisions; analogy and comparison – to characterize deflection in different periods; analysis and synthesis – to substantiate geological and geophysical data; algorithmmization – to determine conceptual provisions regarding the assessment of the oil and gas bearing capacity of the trough. Findings. In order to achieve the goals, the indicators of oil and gas capacity in the areas of the eastern side of the Northern Ustyurt of different geological ages were substantiated. The geological and geophysical features of the basin dating back to 2010 compared to modern refinement of geological data were characterized. The productive and unproductive structures of the eastern side of the Northern Ustyurt are characterized, taking into account the showing of oil and gas based on deposits of different geological ages. The importance of conducting geological exploration and creating corresponding cartographic materials is justified, followed by the design of predictive graphical models, geological sections, and a detailed plan of the territory. Originality. The influence of high hydro carbon generation rates on the further identification of “oil windows” has been substantiated for the first time. The hierarchical levels of predicting the oil and gas content of the trough are identified. The necessity of improving the mechanisms for assessing oil and gas content is substantiated. Practical value. The substantiation of the features of the assessment of the oil and gas content of the of the eastern edge of the Northern Ustyurt, which should be based on forecasting promising areas of prospecting, is the key to distinguishing between productive and unproductive objects, determining their real scale and directing investment flow precisely to promising areas with minimal environmental and economic losses.

Carbon dynamics: A holistic analysis of FDI, trade liberalization, urbanization, economic growth, and effects on CO2 emissions in South Asia

In recent years, South Asian nations have experienced robust economic growth, prompting concerns among policymakers about the sustainability of this growth due to rising pollution emissions. This study conducts an objective assessment of the impact of key variables, such as trade liberalization, economic growth, foreign direct investment inflows, and urbanization, on environmental outcomes across selected economies of South Asia from 1990 to 2022. To describe cross-sectional dependencies in the dataset, panel cointegration techniques are employed alongside cross-sectionally augmented autoregressive distributed lag (CS-ARDL) models. For added robustness, dynamic ordinary least squares (DOLS) and fully modified ordinary least squares (FMOLS) techniques are utilized to investigate the long-term coalition among the variables. The study integrates first- and second-generation panel methods to improve the depth and reliability of the analysis by addressing methodological limitations. The pragmatic results reveal that trade liberalization, FDI inflows, economic growth, and urbanization increase CO2 emissions by 0.392%, 0.354%, 0.275%, and 0.429%, respectively. Dumitrescu and Hurlin (D–H) causality tests show a unidirectional causal link from trade liberalization to environmental degradation. Additionally, a bidirectional causal link is observed between environmental deterioration and both FDI inflows and urbanization in South Asian countries. To mitigate environmental impact, these nations should evaluate foreign investment conditions and enhance technology transfer from foreign enterprises. Furthermore, implementing trade-related policies to reduce CO2 emissions is imperative.

Foreign Direct Investment and Its Effect on Agricultural Productivity Kenya

Kenya has historically been one of Africa's top destinations for foreign direct investment. Foreign direct investment is critical for Kenya's agricultural sector, offering capital, technology transfer, and skill development that enhance productivity and economic growth. Despite agriculture being a primary economic driver, challenges such as limited capital, outdated farming techniques, and insufficient infrastructure continue to hinder growth. The research explores the contribution of foreign direct investment on agricultural productivity in Kenya as well as to assess the effect of foreign direct investment on the productivity levels of small-scale and large-scale farmers in Kenya for a period 1993 to 2022. Neoclassical growth theory, Endogenous theory were key in guiding the study. This study adapted the causal research design employing time series data from World Bank spanning from years 1993 to 2022. Data was analyzed the data both descriptively and by inferential statistics. The findings of correlational analysis revealed a moderate positive relationships (r= 0.3213) between Foreign direct investment and agricultural productivity. Multiple regression analysis confirmed the significant positive effect of foreign direct investment on agricultural productivity with a coefficient of 0.3661 and p value 0.0014<0.05. This signifies that, in the short term, a 1% increase in foreign direct investment results in a 36.61% rise in the growth of Agricultural productivity, assuming all other variables remain constant. The findings implied that foreign direct investment inflow has the ability to create employment, technological development and improve access to international markets playing a pivotal role in accelerating the agricultural productivity. The Kenyan government should have more effective foreign direct investment strategies to facilitate technology transfer agreements between foreign investors and local agricultural enterprises, additionally, the government should pursue macroeconomic policies that attract foreign direct investment by providing an investor-friendly environment.

A Win-Win Relationship between China and Kazakhstan: Thinking Beyond Dependency

This article focuses on the economic cooperation between China and Kazakhstan from a win-win perspective. Kazakhstan’s geographical location and rich natural resources make it a strategic partner for regional and global actors. Dependency theory is often used to explain asymmetric and unequal relations between developed and developing countries. According to this theory, developing countries become dependent on developed countries, which hinders their economic development. However, it is argued that this traditional theory cannot fully explain only partially China and Kazakhstan. Economic cooperation between China and Kazakhstan has been analyzed through trade relations, investment flows, and significant infrastructure projects. These projects reinforce not only financial but also political and cultural interactions. Dependency theory cannot fully understand the relations between China and Kazakhstan, characterized by mutual benefit and win-win situations. China’s investments in Kazakhstan and Kazakhstan’s multi-vector foreign policy approach reveal a cooperation model that serves the interests of both countries. China’s BRI initiative and Kazakhstan’s Nurly Zhol program are concrete examples of cooperation between the two countries. This article goes beyond the boundaries of traditional dependency theory and offers a new perspective based on mutual benefit and win-win relationships.

Italian Libyan Relations 1951 – 1969 Eecnomic Study

This study explores the economic dimensions of Italian-Libyan relations from 1951 to 1969, a period marked by the shifting sands of post-colonial geopolitics and economic development. After Libya's independence in 1951, Italy, as a former colonial power, sought to maintain and reshape its economic ties with the newly sovereign nation. This period witnessed significant Italian investment in Libyan infrastructure, oil exploration, and trade, reflecting both countries' evolving economic priorities and strategies. The study examines key agreements, economic aid, and the impact of the oil boom on bilateral relations. By analyzing trade data, investment flows, and political agreements, the research highlights how economic considerations influenced diplomatic interactions and contributed to the broader geopolitical landscape of the region. The findings provide insights into the complexities of post-colonial economic relationships and the strategic maneuvers of a former colonial power seeking to secure its interests in a rapidly changing world.

Russian-Ukraine War and its Impact on the European Economy

This study examines the impact of the Russian-Ukraine war on the economy of Europe, concentrating on trade disruptions, energy security, foreign direct investment (FDI) flows, and the socioeconomic ramifications of the war[1]induced refugee crisis. This study employs the descriptive research design, qualitative research method and a secondary source of data collection. The research uncovers the problems and possibilities coming from the war, as well as the larger implications for economic growth, development, and stability in the area. The results reveal severe interruptions to commercial links between European nations, especially Russia, and Ukraine, with key sectors such as energy, manufacturing, and agriculture facing considerable disruptions. Energy security emerges as a significant worry, spurring attempts to diversify energy sources and lessen dependence on Russian supply. Meanwhile, the war has resulted in a drop in FDI inflows to Russia and Ukraine, aggravating economic concerns in both nations and hurting their growth prospects. Furthermore, the research shows the burden on social welfare systems in European nations hosting migrants, since the inflow of refugees exerts great demands on resources and capabilities. Investments in housing, health care, education, and social welfare are vital for satisfying the different needs of displaced people and facilitating their long-term integration into society. However, issues connected to social cohesiveness, community connections, and political dynamics within host nations also occur. The study recommends diplomatic resolution of the dispute through peaceful discussions, involving European Union (EU) member states- Russia, Ukraine, and other parties. This could involve neutral mediation, de-escalating initiatives, and confidence-building measures.

Inward FDI and regional performance in Europe after the Great Recession

Abstract This paper looks at inward foreign direct investment (FDI) and regional labour productivity in the aftermath of the Great Recession, exploring two FDI-induced effects. The first effect is linked with a capacity of FDI per se to trigger short-term productivity gains in response to a global shock. The second effect is associated with the degree of industrial diversification of these investment flows. The results suggest that it is not the amount of foreign investment received per se that matters for productivity recovery but its composition. A low degree of FDI diversification helped regions to gain productivity after the shock. The effect is stronger in regions with an industrial profile concentrated in a limited number of sectors, particularly in services. FDI can support regional recovery, but in the short run, it does so by matching and reinforcing existing regional specialisation profiles and to the benefit of services-oriented regions.