Foreign Direct Investment Trends Research Articles

Impact of Pandemic on Foreign Direct Investment - A Study from Global Perspective

Abstract: The global economic landscape has been significantly influenced by health pandemics, leading to heightened uncertainties. Using data from past epidemics and economic downturns, this research paper examines the repercussions of these health crises on global economies. Prominent among these health crises is the 1918 influenza epidemic, which Garrett (2008) reveals had severe impacts on investment, human capital, and consumer behaviour. In more recent history, the SARS outbreak in 2003, as analysed by Lee and McKibbin (2004), cost the world an estimated USD 40 billion, highlighting the tangible economic costs of health pandemics. COVID-19, emerging at the end of 2019, has created another layer of global economic uncertainty. Containment measures such as lockdowns and social distancing have led to a ripple effect, causing a downturn in various economic sectors. To better understand the scale of this uncertainty, this study employs the newly developed World Pandemic UncertaintyIndex (WPUI) – a tool introduced in 2020 specifically to measure the economic and political uncertainties introduced by pandemics.A crucial focus of the research is the impact of health pandemics on Foreign Direct Investment (FDI). FDI, a major non-debt financial resource, plays an instrumental role in the economic development of nations. It introduces technical know- how, generates employment, and can be seen as a barometer of a country's economic health. Using the WPUI, the study investigates the consequences of health pandemics on FDI in 142 countries from 1996 to 2019. It identifies patterns in different regions and economic brackets,adding new insights to existing literature. The COVID-19 pandemic has significantly impacted global foreign direct investment (FDI), causing disruptions in both inflows and outflows across countries and regions. This study, drawing from quantitative data from the World Bank and UNCTAD and qualitative insights from FDI experts, examines the extent and nature of this impact from 2019-2023. Results indicate a pronounced decline in FDI flows in 2020 and 2021, with varying impacts based on regional development, economic structures, and exposure to the pandemic. Factors such as digitalisation, diversification, and cooperation have influenced these FDI trends. This researchoffers valuable insights for policymakers navigating the post-pandemic FDI landscape, emphasising the need for further studies on the long-term effects of the pandemic on FDI dynamics. The study further narrows down its focus to India, analysing the FDI trends before and after the advent of COVID-19. Secondary data sources, including RBI bulletins and economic survey reports, provide insights into FDI equity inflows during the pandemic. Preliminary results suggest a considerable dip in FDI equity inflows at the onset of the pandemic. However, there's a noticeable recovery in the second quarter of FY-20, aided in part by significant investments, such as Google's $10 billion injection into the Indian market.In light of these findings, the study offers several solutions to mitigate the impact of pandemics on FDI. These range from promoting investment stability, diversifying investment promotion, and supporting digital transformations, to ensuring global health preparedness and implementing robust economic recovery plans. Effective execution of these strategies, tailored to a country's specific needs, can create an environment more receptive to foreign investment

The influence of foreign direct investments on the economic development of South Caucasus countries

A nation's pace of economic growth in the South Caucasus region is directly influenced by the volume of foreign direct investment (FDI) it gets. This research project examines the effects of foreign direct investment (FDI) on economic growth and stability, with a focus on the three nations of Armenia, Azerbaijan, and Georgia. This research seeks to understand three important aspects: the trends in FDI influx; the industries that draw the highest concentrations of FDI; and the societal consequences of FDI. Examining these three crucial facets of the whole is the aim of this study. The goal of this study is to look at the trends in foreign direct investment (FDI), with an emphasis on the South Caucasus region's growing prominence as a desirable destination for financial investments. To achieve the objectives of this study, we will. Numerous various elements, such as its advantageous geographic position, an abundance of natural resources, and the formation of prospective markets, may be ascribed to its preeminence. The industries with the largest amounts of foreign direct investment (FDI) are also examined in this research, with an emphasis on the manufacturing, infrastructure, and energy sectors' critical roles in promoting economic growth. In this last section of the study, the socioeconomic effects of foreign direct investment (FDI) are examined. The creation of new job possibilities, the diffusion of recently produced technology, and the diversification of exports are some of these outcomes. One of the main topics of this conversation is how these effects contribute to raising the local quality of life and lowering the incidence of poverty. The aim of this research is to examine the many aspects of foreign direct investment (FDI) and how it affects the economic development of countries in the South Caucasus area of the globe. The purpose of this project is to provide useful information on the opportunities and challenges these nations face in their efforts to draw in and use foreign investments in order to achieve sustainable growth and prosperity. The data that will be offered will come from a range of sources, such as focus groups, questionnaires, and interviews.

Relationship Between FDI and India’s Foreign Trade: A Cointegration and VECM Approach

Foreign capital inflows have emerged as a powerful tool for transferring capital and technology from other economies, especially developed countries. Globalization has made way for international business to cross borders. Foreign Institutional Investor and Foreign Direct Investment (FDI) are two modes of foreign investment and FDI is one of the best routes to invest across the border. India has also become an attractive destination for investment due to immense growth potential. The whole world has seen the role of foreign investment in acting as a bridge to link the gap between investment and savings. It helps in maintaining transparency among different countries and promotes bilateral trade between the countries. This paper focuses on analyzing the trend of FDIs and exports along with the relationship between exports and FDI with the help of Johansen Cointegration and Vector error correction model (VECM)

Factors Driving Foreign Direct Investment: An Empirical Investigation Using Multiple Regression

The Philippines actively promotes foreign direct investment to increase economic growth, but has fallen behind its neighbors in the global ranking. This includes the prohibition of owning equity and a limit on the amount of equity that can be owned. The country has been unable to break through the middle-income trap, leading to a disparity in foreign investment due to its inability to adjust its law in global situations. The study sought to determine the trend of foreign direct Investment and the economic factors of the Philippines, and to examine the relationship between FDI and economic factors. Moreover, this study employed a quantitative method to examine the link between factors that may be quantified to evaluate objective hypotheses. Multiple regression analysis was used to measure the relationship between the dependent and independent variables. The study made use of the available secondary data from World Bank, which was from 1971 to 2020. The results showed no significant relationship between the two, suggesting that foreign investment intervention is necessary to ensure an economic upswing.

PERSPECTIVES FOR POST-WAR RECOVERY IN UKRAINE IN THE SPHERE OF ATTRACTING FOREIGN DIRECT INVESTMENTS

This article examines the trajectory and potential resurgence of foreign direct investment (FDI) in post-war Ukraine. The purpose of this study is to determine how geopolitical and economic conditions, external aggression, political instability, and the COVID-19 pandemic have impacted FDI in Ukraine over the past few years. The declining and recovering trends of FDI in Ukraine are examined using historical analysis and a comprehensive review of policies and economic indicators. Regional conflicts and political unrest led to a sharp decline in foreign direct investment in 2014 and 2015, followed by a revival beginning in 2015, with the exception of a brief lapse in 2017. However, the global COVID-19 pandemic again led to a decline in foreign investments, with an increase in 2021 due to improvements in the country's response to the pandemic and its economy. Notably, this increase in FDI was made possible by advancements in shareholder rights protection, open databases for beneficiaries, and simplifying construction permit procedures. The results highlight the effects of war and political instability on the confidence of foreign investors in Ukraine, with the war notably diminishing the investment attractiveness of Ukrainian firms, delaying key reforms, and shifting the geographic focus of FDI. In addition, the harmful effects of the war on living standards have affected domestic demand for goods and services. In terms of its practical value, the article argues that the post-war economic recovery of Ukraine is contingent on creating an environment conducive to direct foreign investment. It promotes the development of investment-attractive projects, particularly in sectors such as ecosystems, energy, agriculture, food, and national industry, while considering ESG sustainability criteria. It emphasizes that the path to recovery requires capitalizing on unique investment opportunities and calls for proactive reform and change management by the political leadership of the country. Consequently, our study provides valuable insights into the potential mechanisms for boosting FDI, ultimately guiding the reconstruction of the war-ravaged Ukrainian economy.

THE IMPACT OF FOREIGN DIRECT INVESTMENT ON FINANCIAL DEEPENING IN NIGERIA

The quest for economic growth and development has been the primary focus of economies worldwide, leading to the formulation of various policies and strategies. Foreign Direct Investment (FDI) is one such strategy, serving as a means to earn foreign reserves and finance capital formation, technology transfer, and trade. Nigeria has consistently been a top beneficiary of significant FDI in sub-Saharan Africa, with FDI inflows fluctuating over time. Despite the benefits of FDI, its impact on financial deepening and economic growth varies across countries and depends on factors such as absorptive capacity and the type of FDI. This study aims to examine the impact of FDI on financial deepening in Nigeria from 1980 to 2022. The research questions address the trend of FDI and financial deepening in Nigeria and the relationship between the two variables. The study will use theoretical frameworks, including the MacDougall-Kemp hypothesis and Dunning's eclectic paradigm, to explore the role of FDI in promoting financial deepening. The findings of this research could have significant implications for policymakers, the Nigerian government, investors, and businesses. Understanding the impact of FDI on financial deepening will help inform appropriate policy measures and strategies to enhance Nigeria's financial sector and spur economic growth. Additionally, the study contributes to the existing literature on FDI and financial deepening, providing valuable insights for future research in this area.

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

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

Foreign Direct Investment (FDI) Inflow and Insecurity in Nigeria: An Empirical Analysis

This paper empirically examines the impact of defence and security on foreign direct investment (FDI) in Nigeria using quarterly historical data covering the period of 1994q1-2019q4 and an ARDL and VAR econometric techniques are adopted as tools of data analysis. The results from both econometric approaches revealed that foreign direct investment responds negatively to the exogenous occurrence of security threats both in the short and long runs. Also, economic instability and uncertainty are shown to cause drag in foreign direct investment inflow in Nigeria. This study further shows that economic liberalization, proxy with trade openness, and economic progress, proxy with the growth of gross domestic product per capita contribute immensely to the flow of foreign direct investment into Nigeria. The study recommendations drawn from the findings are that national security challenges should be addressed without delay by the government at all the tiers levels to change the course of the downward trend of FDI in Nigeria; establish risk adverting policy to reduce economic uncertainty; promote price stability policy to reduce economic instability; diversifying the economy to further increase economic progress which greatly drives FDI inflow, and encourage economic liberalization which brings benefit through market expansion. Keywords: Insecurity, foreign direct investment, uncertainty, instability, trade openness Journal Reference Format: Omoniyi, O.B., Olasehinde, T.J. & Kekeroowo, I.O. (2022): Foregn Direct Investment (FDI) Inflow and Insecurity in Nigeria: An Empirical Analysis. Humanities, Management, Arts, Education & the Social Sciences Journal. Vol. 10. No. 2, Pp 1-12. www.isteams.net/humanitiesjournal . dx.doi.org/10.22624/AIMS/HUMANITIES/V10N3P1

Foreign Direct Investment (FDI) Inflow and Insecurity in Nigeria: An Empirical Analysis

This paper empirically examines the impact of defence and security on foreign direct investment (FDI) in Nigeria using quarterly historical data covering the period of 1994q1-2019q4 and an ARDL and VAR econometric techniques are adopted as tools of data analysis. The results from both econometric approaches revealed that foreign direct investment responds negatively to the exogenous occurrence of security threats both in the short and long runs. Also, economic instability and uncertainty are shown to cause drag in foreign direct investment inflow in Nigeria. This study further shows that economic liberalization, proxy with trade openness, and economic progress, proxy with the growth of gross domestic product per capita contribute immensely to the flow of foreign direct investment into Nigeria. The study recommendations drawn from the findings are that national security challenges should be addressed without delay by the government at all the tiers levels to change the course of the downward trend of FDI in Nigeria; establish risk adverting policy to reduce economic uncertainty; promote price stability policy to reduce economic instability; diversifying the economy to further increase economic progress which greatly drives FDI inflow, and encourage economic liberalization which brings benefit through market expansion. Keywords: Insecurity, foreign direct investment, uncertainty, instability, trade openness Journal Reference Format: Omoniyi, O.B., Olasehinde, T.J. & Kekeroowo, I.O. (2022): Foregn Direct Investment (FDI) Inflow and Insecurity in Nigeria: An Empirical Analysis. Humanities, Management, Arts, Education & the Social Sciences Journal. Vol. 10. No. 3, Pp 1-12. www.isteams.net/humanitiesjournal . dx.doi.org/10.22624/AIMS/HUMANITIES/V10N3P1x

Risk perception in practice of Polish MNCs in Kazakhstan during COVID-19 time

Motivation: The COVID-19 pandemic caused a major crisis in global economy. The year 2020 will be remembered in the history of global economy as the year of a massive supply and demand shock, and, consequently, a slump in economic growth in most countries. The effects of the pandemic will be felt to varying degrees by the majority of the world’s economic entities. One such effect is the radical decrease in global foreign direct investment (FDI). It is hard to assess now how heavily the pandemic will influence the long-term FDI trends. The perception of the pandemic risk is, however, likely to heighten. This article deals with foreign direct investment risks, and more specifically, with the pandemic risk seen as one of natural risks in COVID-19-related contexts. Aim: The article aims to identify how the enterprises with Polish capital in Kazakhstan perceive the pandemic risk in comparison with other FDI risks. The authors of this paper were co-investigators on a scientific research project concerning FDI in Kazakhstan as exemplified by the investment intensity of Polish enterprises. The project was carried out from 2019 to 2021, i.e., when the pandemic started and during its course. The research concept was, however, created before there were any signs of the pandemic. Therefore, the research questions regarding FDI risk in Kazakhstan were not to any extent inspired by this occurrence. Nevertheless, the question about the pandemic risk was included in the research tool. Thus, the perception of this risk became the subject of research. The findings of partial research that are presented in this article are original in nature, because the assessments constituting their basis were formulated at a time when Kazakhstan, like other countries around the world, struggled with the pandemic and when its effects were unknown. Results: According to the enterprises with Polish capital in Kazakhstan, the main areas of risk entailed in their operation in this country were, most importantly, the risks of the investment country and global risks. Local currency exchange risk ranked 1st; as many as 70% of respondents said that this risk perception was high. This was followed by global economic events (e.g. depression), performance risks (e.g. product price, transfer risks, the price of capital) and government policy risks (e.g. tax reforms, monetary reforms, price controls, trade restrictions, nationalisation, government regulation, barriers to earnings repatriation). The 5th most distinctly perceived risk by the studied enterprises was global social events risks, including the pandemic risk. 40% of the surveyed entities defined this risk perception as high, and 30% each as medium and small. The fact that the pandemic risk ranked 5th among other FDI risk components in Kazakhstan indicates its great significance to the enterprises operating there at an early stage of the COVID-19 pandemic, i.e., when the level of uncertainty caused by the pandemic in terms of both its economic and its social effects was very high.

An Overview of Foreign Direct Investment in Albania

The aim of this study is to provide a clear picture of the value and country of origin for foreign direct investment to understand more clearly the current situation and the trend of foreign direct investment in Albania. The data published by the Bank of Albania show that FDI has a significant upward trend in Albania and an extension to more and more sectors of the economy. For empirical analysis, we used regression with primary data obtained from the World Bank for a period of 27 years analyzed with the statistical program SPSS 20. Based on the results of empirical analysis we came to the conclusion that foreign direct investment has had a positive effect on growth in Albania. In addition to the direct positive effect observed on economic growth, it is worth mentioning that foreign direct investment is very important for the country as it plays an important role in infrastructure, employment and consumption.

Foreign Direct Investment and the Profit Rate: Empirical Evidence from the European Union

This article aims to explain recent trends of foreign direct investment (FDI) in the developed world, and specifically in the case of the European Union (EU). It includes an empirical analysis of FDI in two distinct EU country groups and finds that the profit rate plays a significant role in determining FDI patterns. It is shown that relatively less developed Eastern EU members have a higher profit rate and thus have established themselves as an attractive FDI destination within the EU. Additional factors that influence FDI are market size, long-term FDI attractiveness, and trade protectionism. Finally, a sectoral analysis of FDI and trade shows that increased FDI in less developed Eastern EU members is mainly of an export-oriented type. JEL Classification: F14, F15, F21, P16

Foreign direct investment and economic policy uncertainty in China

The trend of foreign direct investment (FDI) in China has switched from inflow to outflow following the rapid economic growth during the past several decades. Stimulated by government policies, in recent years China’s firms have actively sought overseas investment opportunities. This paper examines the relationship between economic policy uncertainty (EPU) and cross-border capital flow decisions for listed firms in China. Our findings demonstrate that EPU originating from China does not seem to dissuade FDI inflow into China, but it does curtail FDI outflow from the country. It appears that government policies and the uncertainty the policies bring are deterministic for FDI.

Foreign direct investment flows: an analysis for Argentina, Brazil, Chile and Mexico based on the Grubel-Lloyd index

This article assesses the importance of using the Grubel-Lloyd (GL) index as a tool to reveal trends in foreign direct investment (FDI). The index was developed to further the study of a fundamental question in international political economy: how FDI affects economies, whether individual or regional, and becomes a general framework indicator of regional behaviour. The index is applied to the four largest economies in Latin America (Argentina, Brazil, Chile and Mexico) in the period 1995–2016, with a view to demonstrating the importance of FDI for the region. However, the “behaviour” of FDI may be different for each country. The article discusses characteristics in each of these countries that differ from those found in the same indicator for a bloc consisting of the developed countries plus China, for which the index as calculated is higher and varies little during the period analysed.

Strategic decision making and influence of economic freedoms on foreign direct investment (FDI) in Bosnia and Herzegovina

Decision making on foreign direct investment (FDI) is a strategic decision for the country, the company, but also the individual, which is strategic. Where to invest, how and when, certainly depends on economic conditions and economic freedoms. Foreign direct investments represent a value of 357 million euros in 2019, representing a significant factor in the overall development of Bosnia and Herzegovina (BiH). Expectations of an increase in the level of foreign investment are also based on the level of economic freedoms. The research results show a significant impact and positive correlation of economic freedoms on strategic decisions on foreign direct investment in Bosnia and Herzegovina. The role and importance of the impact of economic freedoms on strategic decisions on foreign direct investment became especially important in the conditions of the COVID 19 coronavirus pandemic, when strategic decisions were coupled with even greater risks and sensitivity. The COVID-19 pandemic affected foreign direct investment in the world and expectations regarding the trend of foreign direct investment in BiH. According to preliminary data from the Central Bank of BiH for the first half of 2020, FDI is lower by 46.7% compared to the same period in 2019. Foreign direct investment in less developed countries such as BiH will be under additional pressure in 2020/2021, due to the impact of the COVID 19 pandemic. The decline in global foreign direct investment in 2020 and 2021 is estimated at 30-40% as a result of the pandemic. The results of the research cover the period from 1998 to 2020, and show the existence of a positive correlation between these variables. The analysis used an econometric model of multiple correlation analysis Pearson Correlation.

Foreign Direct Investment Trends and its influence on Per Capita Income in India

Foreign Direct Investment Trends and its influence on Per Capita Income in India

The Impact of Foreign Direct Investment on China’s Carbon Emissions

China is world renowned for its significant achievements in several fields. China’s economic growth has been prominent, with the country’s GDP ranking second globally. China’s Foreign Direct Investment (FDI) inflows have been significant, with the country now known as the second largest economy in the world. FDI however does have some negative consequences on China’s environment. While attracting FDI promotes economic growth through industrial upgrading, the deleterious impacts of the latter on the environment cannot be ignored. The current study analyses the actual use of FDI and carbon emissions in China from 1997 to 2018. Quantitative analysis was employed to analyze the trends of FDI and carbon emissions in China as a whole and in the respective regions, namely the eastern, central and western regions. Regression analysis was then conducted to analyze the impact of FDI on carbon emissions in China on the national level and regional levels, i.e., in the eastern, central and western regions. The conclusion of this article is that FDI will play a positive role in China’s overall carbon emissions. The study has important implications for policy. We recommend that the corresponding investment policies need to be formulated according to the different levels of economic development among the regions.

Longitudinal Analysis of Foreign Direct Investment in Ghana

Foreign direct investment (FDI) is a factor that drives the growth and develop- ment of an economy. The in ow of FDI spans across the various sectors of the economy. The study seeks to identify the trend of FDI in the country and also determine whether the number of projects and the sectors they are coming from ....... Keywords : Foreign Direct Investment; sector; project; Ghana DOI: 10.7176/JESD/12-15-06 Publication date: August 31 st 2021

An estimation of the macroeconomic determinants of income poverty in Pakistan? Evidence from a non‐linearARDLapproach

Poverty is considered a complex and multifaceted phenomenon that can be subjected to various socio‐economic factors. This study aims to assess the potential asymmetric influence of foreign direct investment (FDI) and trade openness, controlling for economic growth, health expenditure, and population size on income poverty in Pakistan from 1972 to 2018 by employing the Non‐Linear Autoregressive‐Distributed Lag (NARDL) approach. The results exhibit the presence of long‐run asymmetries among FDI, trade openness, and income poverty. The results also reveal that poverty reacts to the positive and negative trends in FDI and trade openness atypically. Moreover, the findings also confirm that population growth and health expenditures ameliorate the deleterious repercussions of income poverty. For policy‐makers having an interest in asymmetric nexus among FDI, trade openness, and income poverty. As per the findings, relevant policy level suggestions are recommended.

Estabilidad de los regímenes políticos e inversión extranjera directa, período 1969 al 2008

El objetivo de esta investigación es determinar los efectos que tiene la inversión extranjera directa (IED) en la estabilidad de los regímenes políticos democráticos y autoritarios. La inversión extranjera directa ha sido estudiada desde varios ángulos, desde la economía y otras pocas desde la ciencia política. Este ensayo es desde la ciencia política, por ello, se trata de llenar ciertos vacíos en la literatura, partiendo con una idea a priori: la tendencia ascendente de la IED conlleva a una mayor estabilidad de los regímenes políticos. Esta investigación establece la estabilidad de los regímenes políticos como variable dependiente, mientras que la inversión extranjera directa se establece como la variable independiente preponderante. Esta investigación se la realizó en 192 países mediante el uso de la metodología análisis de supervivencia (survival analysis). Según los resultados obtenidos, por un lado, el aumento de la IED tiene un efecto positivo en la estabilidad de los regímenes políticos. Por otro lado, las democracias fuertes son las más importantes para atraer la IED, en la que el régimen político de mayor importancia son las democracias parlamentarias.