Total Inflows Research Articles

MACRO-ECONOMETRIC ANALYSIS OF INWARD CAPITAL FLOWS: A CASE OF NIGERIA IN TIMES OF SECURITY CHALLENGES

This study used quarterly data for the period of 2014Q1–2021Q2 to investigate the macro-econometric implications of capital flows to Nigeria in the face of security challenges. The ARDL bounds test technique identified the long-run relationships between macroeconomic dynamics, insecurity, and total capital inflows to Nigeria, while the error correction mechanism (ECM) identified the short-run relationships. The Toda-Yamamoto test was used to determine whether the model variables were causally related or not. The findings pointed to a short-term negative relationship between insecurity, exchange rates, lending rates, and inflows of capital, while a positive relationship was found between industrial production capacity, the consumer price index, and the total inflows of capital to Nigeria, with insecurity, exchange rates, the consumer price index, and lending rates being the most significant variables. In the long run, insecurity, lending rate, and consumer price index had no significant impact on inward capital inflows, while exchange rate and industrial production capacity exerted significant impacts on capital inflows. The lending rate had a negative impact on overall inflows of capital, whereas the exchange rate, industrial production capacity, and consumer price index had positive impacts. The exchange rate and industrial production capacity were the most important variables that affected capital inflows. Based on the ECM, it was realized that aggregate inward capital flows were stabilized by a factor of roughly 47.2% per quarter in order to reach long-run equilibrium. The Toda-Yamamoto causality tests indicated that the interactions between macroeconomic variables and insecurity strongly influenced capital flows to Nigeria. The overall findings suggested that promoting macroeconomic stability and combating insecurity could improve the investment climate, encouraging foreign capital flows into Nigeria.

Trend of Foreign Direct Investment in Tanzania's Real Estate Industry From 2000 - 2020: A Systematic Review

Foreign direct investment (FDI) has become an area of concern to many developing nations due to the economic benefits it presents to the host nation. Despite the notable growth and potential of the Tanzanian real estate market, there is lack of comprehensive, empirical studies that analyze the specific patterns of FDI inflows in the real estate industry in Tanzania over an extended period and their contributions to national GDP and other economic indicators. This systematic review aims to examine the trend of foreign direct investment (FDI) in Tanzania’s real estate industry from 2000 – 2020. Further, this review helps to determine the contribution of FDI to growth of GDP and other economic indicators in the country. Result shows that there was an irregular trend of FDI inflows in Tanzania’s real estate activities with various asymmetrical decrease and increase throughout the period from 2000 – 2020. However, the FDI inflows in real estate activities is not significantly associated with national GDP, national GDP growth rate, total FDI inflows in the country or contribution of the real estate activities in national GDP. There was a higher growth rate (between 4.2% - 7.5%) of real estate activities from 2000 – 2010, but was followed by a sharp decline to less than 2% in 2011 and then a steady growth rate of above 4% from 2015 – 2020. The percentage shares of GDP by real estate activities was relatively higher and steady from 2000 – 2010, followed by sharp decline from 2010 – 2011 and further decrease towards 2020. Further analysis indicated that there was a general increase in contribution of real estate activities in national GDP from 2000 – 2020. It is concluded that, FDI inflows in Tanzania’s real estate activities show an irregular trend with various asymmetrical decrease and increase throughout the period. The annual growth rate (%) of real estate activities in national GDP displays an irregular trend from 2000 – 2020. Further, there is a general increase in contribution of real estate activities in national GDP during the review period.

Analysıs of Foreıgn Direct Investment Policies and of the Performance of FDI Flows into Türkiye

The purpose of this paper is to overview Foreign Direct Investment (FDI) policies and legal framework over the years in Türkiye and analyze the performance of FDI inflows to the country by using total and sectoral FDI data over the period 1970-2022. With the recognition of positive spillover effects of FDI in bringing foreign exchanges, as well as new technologies, managerial and marketing skills to domestic industries, Türkiye opened its economic activities to foreign capitals by adopting liberal FDI laws and regulations in 1980, 1989, 2003 and 2012. Our study shows that immediately after these years, both aggregate FDI inflows and their sectoral distributions in Türkiye has changed dramatically. For instance, after the implementation of the FDI law in 2003, the service sector attracted the most of total FDI inflows.

Effects of bank branch/ATM consolidations on cash demand: Evidence from bank account transaction data in Japan

This study considers the retrogression event of convenience for bank users as a natural experiment and analyzes the effect of this event on cash demand. Using bank account transaction data, we find that branch/ATM consolidations reduce the amount of cash withdrawals by past users considerably. Particularly, older or less wealthy users were severely affected by the discontinuation of branches. However, we find that branch/ATM consolidations reduce the total expenditure and inflows that include non-cash transactions almost by the same amount, which implies that the retrogression in convenience possibly caused users to shift to other banks for their daily payments. We also document facts about cash withdrawals from ATMs using bank account transaction data.

External finance for climate change mitigation: Assessing the impact of energy aid and total aid inflows on the ecological footprint

This study examines the role of energy aid and total aid inflows in the ecological footprint of BRICS countries while controlling the economic growth, energy consumption, remittance inflows, and foreign direct investment inflows for the period spanning from 1992 to 2016. The empirical outcome of this work shows the long-run relationship for the selected variables. We find that overseas energy aid, total aid, and foreign direct investment inflows reduce ecological footprint while economic growth, remittance inflows, and energy consumption fuel it. These findings are robust across the alternative panel techniques used. However, the results imply that the energy aid, total aid, and investment capital coming from other countries and international agencies to BRICS countries are enhancing green energy plans rather than profiteering. This may be one of the reasons for the reduction of the ecological footprint in BRICS countries. Therefore, this study further suggests an effective climate mitigation policy for ensuring a life-sustaining green environment if the governments of BRICS countries can stimulate greater inflows of overseas energy aid, total aid, and foreign direct investment towards making the investment in green energy plans.

Prediction of hourly inflow for reservoirs at mountain catchments using residual error data and multiple-ahead correction technique

Abstract This study coupled the ensemble learning method with residual error (RE) correction to propose a more accurate hydrologic model for the time-series prediction of the reservoir inflow. To enhance the prediction capability of the model in mountain catchments, three deep learning (DL) models, namely the encoder–decoder gated recurrent units (ED-GRU), encoder–decoder long short-term memory network (ED-LSTM), and combined convolutional neural network with LSTM (CNN-LSTM), were deployed to train reservoir inflow prediction model for the lead times of 1–24 h. The prediction outputs from three DL models were then incorporated into the categorical gradient boosting regression (CGBR) model to resolve the highly non-linear relationship between model inputs and outputs. In the final procedure, the RE correction method was implemented by using the outcomes of the CGBR model to construct the proposed hybrid model. The proposed model was applied to simulate the hourly inflow in the Shihmen and Feitsui Reservoirs. The proposed model achieved improved performance by an average proportion of 66.2% compared to the three DL models. It is demonstrated that the proposed model is accurate in predicting the reservoir peak and total inflows and also performs well for storm events with multi-peak hydrographs.

Regional Distribution of Foreign Direct Investment in India

The tremendous rise in Foreign Direct Investment (FDI) inflows following the economic reforms in 1991, has been one of the most prominent features shaping the behavior of the Indian economy in the past three decades. The present study is based on secondary data and the objective is to examine the trends in FDI inflows to India following the global financial crisis, for the period 2009-2010 to 2021-2022. Additionally, the distributional pattern of FDI among the regions and states of India is also analyzed, using the data for 30 states/territories. The results reveal that total FDI inflows have increased in substantial amounts over the period from US$ 37,745 million in 2009-2010 to US$ 84,835 million in 2021-2022. Maharashtra and Karnataka have surpassed all other states in FDI equity inflows over the period from October 2019 to September 2022. These two states have commanded 50 percent of the total FDI, whereas the regions in central, eastern, and northeast India have received less than 3 percent of the total FDI equity inflows. Thus, the regional disparities in the distribution of FDI are quite visible post-analysis. It is suggested that government should focus on making investor-friendly policies to tap the potential of regions neglected by foreign investors.

Be my guest: the effect of foreign policy visits to the USA on FDI

We examine whether a country leader’s diplomatic visit to the USA affects the Foreign Direct Investment inflow. The literature so far has found inconclusive results regarding diplomatic relations' effect on international flows. We use a dynamic Inverse Probability Weighting Regression Adjustment framework to examine this relationship and estimate the causal effect of foreign visits. Our results indicate that a visit to the US increases the country’s total FDI inflows by up to one percentage point per annum, with a cumulative effect reaching 2.5 percentage points six years after the visit. However, this is a short-run effect as it disappears in the subsequent years. Furthermore, our first-stage results shed light on the profile of the leaders that visit the US. Our findings are consistent with the view that foreign visits act as signals to investors regarding the country’s political risk.

Shadow economy and FDI: the role of corruption and land resource

PurposeThis research examines how shadow economy affects foreign direct investment (FDI).Design/methodology/approachThe study utilizes a panel dataset including 124 nations between 1997 and 2015. Information on shadow economy, FDI and macro-economic characteristics is obtained from the United Nations Conference on Trade and Development (UNCTAD) and World Bank database. Various econometric methods are employed, such as the panel ordinary least squares (OLS) with fixed-effect estimator and the two-step system generalized method of moments estimation.FindingsThe findings of the study illustrate that shadow economy negatively influences total FDI inflows, and this adverse impact is mainly driven by greenfield investments – a component of FDI. Moreover, the authors provide evidence that the shadow economy has more devastating influences on FDI inflows in countries with higher corruption levels and fewer land resources.Practical implicationsOverall, this research suggests an important policy implication that the shadow economy should be controlled more strictly since it harms the FDI inflows, especially greenfield investment.Originality/valueThis research is among the first attempt of evaluating the effect of shadow economy on different FDI types. Furthermore, it examines how the shadow economy–FDI inflows nexus is changed when considering factors including corruption and land resource.

The impact of institutions' quality and information availability on capital inflows volatility in selected MENA countries

PurposeThis paper aims to discuss the main characteristics of the Middle East North Africa (MENA) region's capital inflows volatility. It also examines the effect of institutional quality and information availability on capital inflows volatility in selected MENA countries (Bahrain, Egypt, Israel, Jordan, Kuwait, Libya, Morocco, Oman, Saudi Arabia and Tunisia) in the period 1996–2017.Design/methodology/approachThe study's assessments are based on the International Country Risk Guide (ICRG) and globalization indices. It also employs an updated data set of balance of payments indicators released by the International Monetary Fund. Moreover, the study uses econometric panel modeling of random effect model, with Driscoll-Kraay robust standard error, to analyze the relationship between capital inflows volatility, institutional quality and information availability.FindingsThe paper finds that both institutional quality and information availability are in an inverse relationship with the total capital inflows volatility in the MENA region. However, the findings vary across the different components of total capital inflows. For example, the volatility of foreign direct investment (FDI) declines, like total capital flows, as the two factors improve. However, the volatility of foreign portfolio investment (FPI) is negatively related to institutional quality but does not have any significant relationship with information availability. While the volatility of foreign other investments (FOI) decreases with the availability of information, but does not have any significant relationship with institutional quality.Originality/valueThis paper expands the limited literature regarding the determinants of capital inflows volatility. Furthermore, it is the first study that investigates the effect of institutional quality and information availability on capital inflows volatility in the MENA region.

Official visits and foreign direct investment

This paper examines the effect of official visits by U.S. Presidents and Secretaries of State on foreign direct investment inflows. The key difficulty in determining a causal effect is the issue of endogeneity. To address potential endogeneity, we use the Endogenous Treatment model (ETM). The estimation results provide evidence that the official visits of U.S. Presidents have a statistically significant positive effect on both foreign investment inflows from the U.S. and on total foreign direct investment inflows. This is robust even after the inclusion of other control variables identified by the literature as confounding factors for foreign direct investment. When we examine the effect of different types of visits, the results show that bilateral meetings during the official visits of U.S. Presidents have a statistically significant positive effect on both foreign investment inflows from the U.S. and total foreign direct investment. These results imply that the visits of U.S. Presidents offer a signal of the confidence of American administrations in the host country, which may in turn encourage American and non-American firms to invest in that country.

The impact of economic sanctions on foreign direct investment: empirical evidence from global data

PurposeThis study investigates the impact of global economic sanctions on foreign direct investment (FDI).Design/methodology/approachData were gathered from several sources, including the United Nations Conference on Trade and Development, the Global Sanction and the World Bank database, to build a dataset that consists of 172 countries during the period 2003–2019. The panel ordinary least square with a fixed-effects estimator was exploited to achieve the research objective.FindingsThe research findings reveal that sanction exerts a detrimental effect on the total inflows of FDI and its components. Regarding different types of sanctions, while military and trade sanctions have little or even no impact on greenfield investment, they have more adverse and sizable effects on cross-border mergers and acquisitions (M&As). The authors further show that sanctions exert devastating influences through the infrastructure and economic development channels.Practical implicationOverall, this study implies that a closer look at particular types of FDI is required when implementing policies as different types of FDI may be affected differently by changes in the economy, such as economic sanctions.Originality/valueThis paper is the first empirical study that critically investigates the impact of sanctions on the total inward FDI flows and its two components: greenfield investment and cross-border M&As. It then explores how the sanction–FDI nexus varies depending on several country-level economic factors to understand better how sanctions and different types of sanctions are related to international trade and relations.

Water budget of a Ramsar site in Ecuador

Wetlands have been degrading and disappearing due to several anthropogenic impacts, such as pollution by discharge of domestic and industrial wastewater, agricultural runoff, land conversion, etc. The assessment and forecast of hydrological processes in wetlands, namely inflows and outflows, is essential for developing and implementing plans aimed at managing and protecting wetlands areas. We estimated the water budget of a Ramsar site, La Tembladera wetland, for a two-year period (2018-2019) by using the water balance method. The evapotranspiration was calculated using the Thornthwaite method and the runoff was estimated using the Curve Number method. The proposed water balance model showed that the major inflows to the wetland were the San Agustín and Bellavista canals, and Estero Pinto, about 92.9% (2018) and 90.5% (2019) of the total inflows. The runoff and wastewater flows represented the minor inflows. The runoff was 0.003% in 2018 and 0.004% in 2019, whereas the wastewater volume accounted for 0.05% of all inflows in both years. The actual evapotranspiration was the major outflow in both years, being 67.1% (2018) and 73.6% (2019) of the total outflows. On the other hand, the irrigation canal was the minor outflow, 32.9% in 2018 and 26.4% in 2019. Therefore, La Tembladera wetland hydrology is mostly linked to the canals system and climate conditions, precipitation and actual evapotranspiration. Our findings could be the basis for further research and developing plans in order to rationally manage and protect this wetland of international importance.

FDI and Economic Growth: A new Look from the Sectoral Perspective

Abstract This paper investigates the impact of foreign direct investment (FDI) on economic growth in a sample of 10 ex-socialist European and Asian countries. While the link between FDI and economic growth has been extensively investigated in empirical literature, this paper contributes to this literature by econometrically investigating the effects of FDI inflows in specific sectors using the panel data estimation techniques. In addition to confirming the positive impact of total FDI inflows on economic growth, using the WiiW (the Vienna Institute for International Economic Studies) FDI database, which disentangles the FDI data across different industries, the paper finds significant effects of FDI inflows in manufacturing on growth, whereas FDI inflows in other sectors are only sporadically statistically significant. This finding serves as a basis for further investigation of the specific subsectors (NACE 2-letter classification) within manufacturing, and the empirical investigation finds that not all FDI inflows within manufacturing enhance economic growth.

Effect of Aid for Trade and Foreign Direct Investment Inflows on the Utilization of Unilateral Trade Preferences Offered by the QUAD Countries

This paper investigates the effect of Aid for Trade (AfT) flows and foreign direct investment (FDI) inflows, as well as their interplay on the utilization of non-reciprocal trade preferences (NRTPs) offered by the Quadrilaterals (i.e., QUAD countries, which are Canada, the European Union, Japan, and the United States). Two major blocks of NRTPs provided by the QUAD countries have been considered, namely, the Generalized System of Preferences (GSP) programs and other NRTPs. The analysis has covered 114 beneficiary countries of these NRTPs and the period of 2002–2018. Several findings have emerged from the analysis. Total AfT flows and FDI inflows contribute to enhancing the utilization rate of both GSP programs and other NRTPs, and are strongly complementary in affecting positively the utilization of both types of NRTPs. Finally, beneficiary countries’ level of export product diversification matters for the effect of both AfT flows and FDI inflows on the utilization of NRTPs. The conclusion section discusses the implications of these findings.

Probabilistic forecasts of international bilateral migration flows

We propose a method for forecasting global human migration flows. A Bayesian hierarchical model is used to make probabilistic projections of the 39,800 bilateral migration flows among the 200 most populous countries. We generate out-of-sample forecasts for all bilateral flows for the 2015 to 2020 period, using models fitted to bilateral migration flows for five 5-y periods from 1990 to 1995 through 2010 to 2015. We find that the model produces well-calibrated out-of-sample forecasts of bilateral flows, as well as total country-level inflows, outflows, and net flows. The mean absolute error decreased by 61% using our method, compared to a leading model of international migration. Out-of-sample analysis indicated that simple methods for forecasting migration flows offered accurate projections of bilateral migration flows in the near term. Our method matched or improved on the out-of-sample performance using these simple deterministic alternatives, while also accurately assessing uncertainty. We integrate the migration flow forecasting model into a fully probabilistic population projection model to generate bilateral migration flow forecasts by age and sex for all flows from 2020 to 2025 through 2040 to 2045.

Performance of biogas plant analysis and policy implications: Evidence from the commercial sources

This study investigates the potential of biogas as a commercially viable alternative energy source in Pakistan due to her large agricultural base. The production of biogas is a source of utilizing enriched livestock manure resulting in smell reduction, village sanitation, and environmental improvement. The cost-benefit analysis approach is adopted to explore the empirical findings. The analysis is carried out on four different commercial biogas plants with capacities ranging from 20 to 200 m3 that have been erected in various parts of Pakistan, the majority in Punjab province due to their agricultural and animal capacity. Total inflows are calculated which include installation, administrative, operation, and maintenance costs. Although benefits extracted are examined in terms of monetary value. Meanwhile, it is concluded through quantitative assessment that 8 out of 9 plants are giving good returns, which can cater to the energy needs. Furthermore, it can be suggested that commercial use of biogas is feasible and profitable with an acceptable rate of returns with proper operating and feeding of the plant is essential for success. Therefore, training should be provided to agriculture and livestock farmers so that they can perform better in the development of biogas plants.

Gross Capital Flows by Banks, Corporates, and Sovereigns

Abstract We construct a new quarterly data set of international capital flows broken down by sector—banks, corporates, and sovereigns—and demonstrate the importance of distinguishing capital flows by the sector of domestic borrowers and lenders. We document four new sets of facts. First, banks account for the largest part of the external debt (stocks and flows) in advanced economies, whereas in emerging markets, banks, corporates, and sovereigns have roughly equal shares. Second, the high correlation between total capital inflows and outflows documented in the literature is driven by banking sector flows; that is, domestic banks’ borrowing from foreigners is highly correlated with domestic banks’ lending to foreigners. Third, sovereign flows behave very differently from and often act as a countervailing force to private sector (banking and corporate) flows, especially in emerging markets. Fourth, different shocks (global financial cycles versus domestic business cycles; banking versus currency versus sovereign crises) generate very distinct patterns of capital inflows and outflows by sector. The stylized facts we document deepen our understanding of the dynamics and behavior of capital flows and have important implications for open economy models.

Vascular and Transpiration Flows Affecting Apricot (Prunus armeniaca L.) Fruit Growth

Fruit growth is a biophysical process that depends mainly on the daily balance between vascular (xylem and phloem) and transpiration flows. This work examines the seasonal and daily behaviour of apricot fruit growth as well as their vascular and transpiration flows. Seasonal patterns of the shoot and fruit growth, as well as fruit surface conductance and dry matter accumulation, were monitored at regular times intervals during the season on “Farbela” and “Ladycot” cultivars. In addition, the daily courses of leaf and stem water potentials and leaf gas exchanges were monitored at 66 and 109 DAFB. On the cultivar “Farbela”, the daily patterns of phloem, xylem, and transpiration flow to and from the fruit were determined through precise and continuous monitoring of fruit diameter variations. Branch sap flow was also determined through the thermal balance method. Apricot fruit growth showed a double sigmoid pattern, typical of other drupaceous species. Stem and leaf water potential maintained values above the stress threshold, and in the last part of the season, the leaf photosynthetic rate increased. Leaves received higher sap flow in the morning and at midday, while a higher amount of xylem water was moved to the fruit in the late afternoon. Fruit showed high transpiration rates, which led to fruit shrinkage during the warmest hours of the day. High xylem inflows balanced the transpiratory losses, while phloem import was lower and occurred mainly during the mid-day hours. As a result, the fruit grew mostly in the late afternoon and night, and its growth was sustained mainly by xylem fluxes, which represented over 90% of the fruit’s total inflows. Later in the season, fruit transpiration and xylem flow decreased but did not stop even at harvest. Phloem import increased its importance throughout the season and, in the final stages, accounted for 36% and then 66% of the daily relative contribution to fruit growth. This knowledge represents a starting point to improving apricot orchard management in terms of irrigation and fertilisation.

The influence of rainfall and catchment characteristics on runoff generation in urban catchments-a case study in Hebi City of China.

An in-depth understanding of the rainfall-runoff process is essential for effective stormwater management. However, the understanding of the hierarchy of rainfall characteristics in terms of their importance in influencing runoff generation is limited. This paper investigates the influence of rainfall characteristics and catchment characteristics on runoff generation in urban catchments. The outcomes showed that there are 4 dominant factors affecting runoff generation: total precipitation TP and maximum 60-min rainfall intensity MAX60 are the two top-ranked factors while average rainfall intensity RI and maximum 5-min rainfall intensity MAX5 are ranked second. Additionally, compared to the moderate rainfall regime (MR), the heavy rainfall regime (HR) tends to produce higher peak flow rates, higher total inflow per unit area, and lower runoff control effect. Note that the antecedent precipitation has a more significant effect on runoff generation and is even the dominant factor when rainstorm events with daily rainfall larger than 50mm are not considered. The results of analyzing the influence of catchment characteristics suggest that only under HR regime conditions do the catchment characteristics have an impact on runoff generation and behave as smaller catchment areas, and higher proportions of green landscapes always lead lower peak flow rates, lower total inflows per unit area, and higher runoff control effects.