Value Of Foreign Direct Investment Research Articles

Trade Openness and Life Expectancy: Evidence from Nigeria

The health sector in Nigeria is at risk following barriers to international trade, as trade across Nigeria and the rest of the world may not be sufficiently promoting health indicators in particular life expectancy. This paper examined the impact of trade openness on life expectancy in Nigeria from 1986 to 2023. This paper utilized the autoregressive distributed lag model (ARDL) on trade openness, foreign direct investment, hospital infrastructure, electricity consumption and government health expenditure. From the result, it was showed that trade openness had a negative impact on life expectancy, while the three lagged value of foreign direct investment had a positive impact on infant mortality. As a way of policy implementation, the Government should create mechanisms to control the extent to which the economy is opened to the external world. This is because illicit and substandard health goods could be brough tinto the country which could have adverse and negative effect on the health come in the long run in Nigeria.

Effect of inward foreign direct investment on entrepreneurship productivity in emerging markets

This study explores the effect of inward foreign direct investment (FDI) on entrepreneurship productivity, which reflects the quality of entrepreneurship and is measured through the ratio of opportunity-to-necessity entrepreneurship, in emerging markets. Using data across 67 emerging markets during 2002 and 2018, we find that inward FDI has a positive effect on entrepreneurship productivity and this effect is positively moderated by both financial market efficiency and labor market flexibility. However, these effects are not found in developed economies. This study not only enriches our knowledge of the antecedents of entrepreneurship productivity and the value of inward FDI, but also helps explain why some emerging markets benefit to a greater extent from inward FDI than others. Moreover, it provides guidance for emerging market governments taking advantage of inward FDI to improve entrepreneurship productivity.

Financial and investment indicators for accelerating innovation development: Comparison of GII leaders and Ukraine

The purpose of the paper is to determine the causal relationship between financial and investment indicators and the level of innovation development in GII leading countries and Ukraine. For a sample of 10 leaders in GII-2022 and Ukraine for 2011–2020, a correlation analysis was conducted based on the following indicators: the value of GII, foreign direct investment (net inflows), domestic credit to the private sector, ease of getting credit, protecting minority investors, and real interest rate. A positive relationship (with moderate/high strength) between innovation development and foreign direct investment has been proven in 7 out of 11 countries with a time lag of 0-2 years; domestic credit to the private sector – in 6 countries (lag of 0-3 years); and protecting minority investors – in 9 countries (lag of 0-2 years). For other indicators, the relationship is negative. Through VAR-modelling and Granger test, it is proven that the change in the value of foreign direct investment causes the change in the value of GII in 6 countries (bidirectional causality exists only in Ukraine); domestic credit to the private sector – in 6 countries, protecting minority investors and real interest rate – in 2 countries, and ease of getting credit – only in Switzerland. The results show that foreign direct investment and domestic credit to the private sector are the reasons for increasing the level of innovation development and have potentially the highest influence. In Ukraine, compared to GII leaders, only the factor of foreign direct investment is identified as a cause of innovation development.

The Influence of Foreign Direct Investment (FDI), International Tourism and Export Value on Economic Growth in Member Countries of the Organization of Islamic Cooperation (OIC) During 2010-2020

Studies the effect of FDI, international tourism, export on economic growth have various results. Therefore, this study aims to determine the effect of FDI, international tourism, and exports on economic growth in OIC member countries in the 2010-2020 period using the panel data regression method. The number of samples used in this study were 45 countries. Simultaneously, there is a significant influence between the variables of FDI, international tourism, and export value on economic growth in OIC member countries. While partially FDI shows negative and significant results. On the other hand, international tourism has a positive and significant effect and exports also have a positive and significant effect. This study is only limited to 11 periods and three independent variables. For future researchers, it is expected to develop the number of variables and can increase the observation time.

UNPACKING THE RELATIONSHIP: FDI, ECONOMIC GROWTH, AND SERVICE SECTOR VALUE ADDITION IN GHANA

This study delves into the intricate relationship between Foreign Direct Investment (FDI), economic growth, and service sector value addition in Ghana, aiming to provide insights into the dynamics shaping the country's economic landscape. Ghana has witnessed a surge in FDI inflows in recent years, particularly in the service sector, which has become a key driver of economic development. Through a comprehensive analysis of macroeconomic data and sector-specific trends, this research explores the impact of FDI on economic growth and the value addition within the service sector. Employing quantitative methods and econometric modeling, the study examines the causal relationships and dynamics among FDI, GDP growth, and service sector value addition. The findings shed light on the role of FDI in stimulating economic activity, fostering innovation, and enhancing productivity within the service sector, thereby contributing to overall economic growth and development in Ghana.

The Asymmetric Effects of Foreign Direct Investment Inflow on Economic Growth: Fresh Evidence from Somalia

Purposes: Although there has been some progress since the 2012 establishment of the Federal Government Somalia, Foreign direct investment is the one of critical engines in economic growth. The latest value of foreign direct investment for 2021 was 5.97% of GDP, comparison of previous years to 2020 was 6.74% of GDP in Somalia. This paper aims to investigate the asymmetric effects of foreign direct investment (FDI) inflow on economic growth in Somalia from 1977-2021. In addition to FDI, inflation, gross capital formation, and trade openness are used as control variables to examine their influence on economic growth. Design/Methodology/approach: This research employs the nonlinear autoregressive distributed lag (NARDL) technique. Finding: The findings reveal that a positive shock in FDI positively influences Somalia's economic growth, while a negative FDI has a negative impact. The Wald test establishes the asymmetric effect of FDI on economic growth in both the short and long run. Moreover, trade openness and inflation rate significantly reduce the pace of economic growth in both the long and short run. However, gross capital formation only boosts economic growth in the long run. Research limitations/ implications: although Somali faced a lot of challenges including civil war, terrorists, macroeconomics instability, poor infrastructure, and corruptions are not considered owing to data availability. Policy implications: firstly, increase revenue through tax reforms and anti-corruption measures. Secondly, initiatives policies that help public finance investments and reduce trade barriers. Finally, maintain macroeconomic stability of inflation, and exchange rates, can help reduce the negative impact on economic growth improve the investment climate and Somalia’s image abroad.

Negative Interest Rates and Its Impact on GDP, FDI and Banks’ Financial Performance: The Cases of Switzerland and Sweden

The article deals with the issue of how negative interest rate policies, introduced in the second decade of the 21st century in some countries, affect certain macroeconomic indicators and bank performance. We concentrate specifically on Switzerland and Sweden. We use correlation analysis to reveal the relationship between interest rates and GDP, the level of foreign direct investment (FDI) and some indicators of banks’ performance. We found that negative interest rates (NIRs) are strongly correlated with the level of GDP in both Switzerland and Sweden but that they do not affect their FDI. The share of banks´ deposits in GDP is also strongly correlated with NIR. Other indicators of bank performance do not show a strong correlation for both countries. Our evidence is consistent with NIR not being associated with undesirable effects concerning economic growth and bank performance in Switzerland and Sweden. The value of FDI depends on many factors—mainly on the attractiveness of a country for foreign investors in terms of its political and economic stability and by general conditions for business operation.

Factors Influencing Foreign Direct Investment Inflow in Somalia

Purposes: The last four decades, the value of foreign direct investment (FDI) inflow in Somalia has fluctuated between $339,000,000 in 2016 and $43,390,000 in 1970. Thus, this research investigated the factors influencing foreign direct investment (FDI) inflows in Somalia. Over the period from 1980-2017 and data are obtained from the World Bank. Design/ Methodology/ approach: this study used The Vector Auto regression (VAR) model. The econometric methodology to be utilized includes the unit root test for used Augmented Dickey-Fuller (ADF), co-integration test, Johansen integration test and diagnostic test includes serial correlation, normality, heteroskedasticity and AR root test. Furthermore, they are also utilized for VAR Granger causality tests. Findings: The findings of this paper indicated unit root test showed that all variables except external debt are not stationary at the level but become stationary after first differencing at the 10% level of significant. The co-integration test indicates the relationships between variables are integrated. The Granger-causality test shows only one-way Granger-causality relationships from FDI to GDP, import and export variables or so-called unidirectional Granger causality. Moreover, impulse response function indicates results all variables are positive related in the short run and long run except for imports which is negative related with FDI. Although, GDP, imports and inflation are significant to FDI, but export and external debt are insignificant to FDI. Therefore, this research concludes that FDI influences economic growth in Somalia. Research limitations/ implications: Although this research has expended and evolved prior studied various respects, a comprehensive and systematic time-series study on FDI and its determinants in Somalia would involve more capitals than had been made available for this study. There are still a number of specific constrains to be noted on the investigating FDI and its determinants in this paper, some factors such as political and macroeconomic instability, human capital, infrastructure and corruptions are not considered owing to data availability. Moreover, it’s recommended that future studies could improvement widely and update research in FDI.

Impact of Inflation on Vietnam FDI and Export Value after the COVID-19 Pandemic

In the first quarter of 2022, many countries in North America and Europe experienced a rapid increase in the inflation rate. High inflation is expected to slow down post-pandemic economic growth expectations in Vietnam and many other countries. This study synthesizes the latest economic data collected in Vietnam along with several developed countries around the world. The purpose of this study is to analyze the risks that inflation can affect two of the important drivers of Vietnam's economic development after the COVID-19 pandemic. The two growth drivers of Vietnam's economy analyzed are foreign direct investment (FDI) inflows and Vietnam's exports. This research uses a combination of methods such as statistics, synthesis, interpretation, comparison, and inductive. The authors use EViews 11 to obtain lag optimal-order selection statistics for Vector Auto-regression (VARs). Granger causality test and impulse response were also used. This study indicates that the expected growth in the value of Vietnam's exports to other countries and the number of FDI inflows into Vietnam may be negatively affected by high global inflation. The difficulty in exporting challenges the recovery of Vietnam’s economy after the COVID-19 pandemic . However, this paper finds positive internal signals that can help Vietnam's recovery. Besides, this study provides strategies that can be applied in Vietnam to limit the risks posed by high inflation to attract FDI and export capital flows. Keywords: inflation, foreign direct investment, export, COVID-19 pandemic . DOI: https://doi.org/10.55463/hkjss.issn.1021-3619.60.9

Foreign Direct Investments in Poland against Countries of Visegrad Group

In the period of scarcity of investment capital, foreign direct investment (FDI) is an important source of its acquisition. These investments flow to the host countries in various conditions and consequences for the economy. The concept of linking the country’s position in terms of inflow and outflow of foreign direct investments with its economic development is the concept of the investment and development path – IDP (The Investment Development Path). The article diagnoses changes in the value of foreign direct investment in Poland against economies of Visegrad Group in 1995-2020, taking into account the effects of the pandemic on changes in FDI flows in 2016-2021. Against this background, the development of the Polish economy was diagnosed in the light of the path theory (IDP). The analysis covers the years 1995-2020 and 2016-2021 and uses data from UNCTAD and the World Bank. In the periods selected for the analysis, one can notice definitely different dynamics of changes in the value of FDI liabilities. The reaction of foreign investors in selected location markets varied during the pandemic. The diversification of the cumulative value of FDI receivables for individual countries is significant. During the pandemic, investors reacted to the situation in different ways. Among the selected countries, an increase in the value of FDI undertaken abroad was recorded in Slovakia and the Czech Republic. Polish investors and investors from Hungary made investments with lower values than in 2020. In all years, NOIP for Poland takes negative values, so the level of FDI undertaken in Poland exceeds the level of investments undertaken abroad. Identifying the transition to one of the most important stages on the IDP path – stage III is difficult. It is debatable to determine the period in which Poland entered such a stage. This results, among others, from low FDI. It is indicated that this is a period from 2004 to even 2013.

Foreign Direct Investment and Firm Value: Evidence from Selected Countries in Sub-Saharan Africa

ABSTRACT The study investigates empirically the impact of foreign direct investment inflows to firms on firm value in South Africa, Nigeria and Ghana using listed firms. In order to control for any possible endogenity problems in the model, the study adopts a robust System Generalized Method of Moments to investigate the relationship between Foreign Direct Investment (FDI) and firm value (measured using Tobin’s Q and ROA) from the period of 2008 to 2019. From the findings, it is established that FDI has a positive significant impact on firm value in all the three countries (South Africa, Nigeria and Ghana). This positive relationship between FDI and firm value in the selected countries can be attributed to; technological transfer, managerial transfer, innovation transfer and skills transfer in favor of the host firms through inflows of FDI. This study does not only serve as a reference work for subsequent investigations into the impact of FDI on firm value in Sub-Saharan Africa, but it also serves as a guide to policy makers on the impact of FDI inflows to firm value in the region. It is one of the pioneering works that comprehensively examines the effect of FDI inflow on firm value among firms in Sub-Saharan African and also controls for endogeneity effects in the panel set.

Uses of the Revised Exchange Rate to Maintain Fair Value of Assets under Covid-19 Crisis

The research aims to identify the effect of using the modified exchange rate in preserving the fair value of the assets, which are the most important economic variables in the Iraqi economy, which are the growth rate of the amount of money in circulation, the value of Iraq’s crude oil exports, the rate of inflation, the rate of growth of the gross domestic product, which expresses the rate of economic growth and the value of spending Government and the value of foreign direct investment in the presence of the COVID-19 crisis. The research found that the effect of the adjusted exchange rate value on both the rate of growth in the amount of money in circulation in Iraq and the growth rate of GDP in Iraq during the period (2004-2018) was not significant, while the significant effect of the value of the adjusted exchange rate on both the value of Iraqi exports Of crude oil in Iraq, the rate of inflation, the value of government spending, the value of foreign investment during the period (2004-2018). The effect of the revised exchange rate was evident in maintaining the fair value of assets in general and in light of the COVID-19 crisis in particular. The research recommended the necessity for the Central Bank of Iraq to use more effective monetary policies that would help increase the impact on the rate of growth of the amount of money in circulation as well as the rate of growth of gross domestic product, the need to work to diversify sources of income in the Iraqi economy and encourage development in all economic sectors and reduce dependence on oil as a main source For income in Iraq, work to develop economic and financial policies that encourage companies and individuals to invest in all non-oil economic sectors, the need to develop monetary policies that can confront emergency situations that may occur, activate the role of crisis management and increase their levels of efficiency.

Effect of Foreign Private Investment on the Development of Small and Medium Enterprises in Nigeria

This study sought to examine the effect of foreign private investment on the development of small and medium scale enterprises (SME’s) in Nigeria. The study adopted a longitudinal research design which made the use of secondary data imperative. The study employed data on the foreign private investments and development of SMEs in Nigeria covering 1991-2018. The variables used are Net Foreign direct investment, Net Foreign Portfolio investment, percentage of foreign direct investment in Gross Domestic Product (GDP), and development of SMEs in Nigeria. The technique adopted in this study is multiple regressions to test the hypotheses. E-view econometric software 3:1 was used for the analysis. The result revealed that the value of Foreign Direct Investment (FDI) and Foreign Portfolio Investment (FPI) have a negative relationship with the development of SME’s and Foreign Direct Investment (FDI) in the percentage of gross domestic product and exchange rate have a negative and significant impact on the development of SME’s in Nigeria. It was recommended among others that government should increase its funding of small and medium scale enterprises, SME’s should be encouraged to go on public offer to expand the scope of funds, the exchange rate must be strengthened to encourage SME’s to attract funds and the needs to stabilized the economy to discourage divestment.

IMPACT OF STOCK MARKET DEVELOPMENT ON ECONOMIC GROWTH: EMPIRICAL EVIDENCE

Development of non-oil sector of Azerbaijan was always one of the main priorities of the government. Oil sector of the economy was well developed since Azerbaijan got its independence, but in order to use the oil source more effectively it was determined to diversify the funds into non-oil sector of the economy, which in the end gave huge boost to most industries of the economy and led to increase of foreign direct investment. However, another source of the foreign direct investment and investor attraction – stock markets, were not developed and organized properly up until 1998, which was mainly due to outdated procedures left from USSR, absence of principles, methodology and understanding of how stock market can play huge role in expansion of economy and attraction of foreign investment. Nowadays, Azerbaijan has all possibilities to widen the stock market, enable easy way of increasing number of small businesses, startups and open the doors for them to global economy and lead to speedy expansion of the businesses. This research analyses the possible relationship between stock market development and economic growth, in order to predict possibility of positive impact of stock market on economic growth, overall social economic welfare of the country and business environment. For the purposes of the research, statistical figures of the country`s main economic indexes were collected: gross domestic product value, foreign direct investment value, stock market liquidity and turnover values, which were then analyzed and tested on various levels of cointegration test, Granger Causality test, vector error correction model and etc. All the analysis were done on statistical software Stata 11 based on figures of 1998-2016. The outcome of the Johansen-Julius shows existence of cointegration and by that VECM test proves relationship between stock market and economic growth in long run, while Wald Test confirms correction of this growth in short term by given explanatory variables. Hence, Granger causality test is conducted further, which determines bidirectional relationship between 3 variables: foreign direct investment, GDP and LIQ (stock market liquidity level). Based on the outcome of the analysis, study concludes that expansion of stock market and increase in foreign direct investment will have chain effect which leads to economic growth and social welfare in Azerbaijan.

Collaborative public spaces and upgrading through global value chains: The case of Dongguan, China

AbstractResearch SummaryHow do multinational enterprises (MNEs) address host‐country challenges after the initial investment? And when does foreign direct investment (FDI) result in local upgrading? Using a study of FDI and global value chain participation in Dongguan, China, we find a mechanism in which FDI results in sustained local economic upgrading and improved MNE subsidiary performance: a collaborative public space (CPS). A CPS is a social space based on trust that enables different and divided actors to engage, sharing concerns and information in ways that they otherwise would be disinclined to consider. Using the CPS concept, we expand understanding of the effectiveness of MNE strategies in host‐country environments and the conditions in which FDI leads to change in global value chains.Managerial SummaryThe international strategy literature has found that FDI has ambiguous impacts on host‐country regions and firms, leading in some cases to upgrading or in others to local firm deskilling or decline. It has also shown that the postinvestment strategies of MNEs, particularly political connections or business associations, have mixed results. Using the concept of a CPS, we show how the construction of a trust‐based social space can improve MNE subsidiary and local firm performance and lead to changes in the structure and composition of global value chains (GVC). The GVC changes by incorporating new host‐country suppliers and buyers as well as increasing the value‐added, thus creating a new node and exchange patterns in the GVC.

A Study on Impact of Make in India in Indian Foreign Direct Investment

That impact of globalization on employment can be a Central concern of current political current economic climate. For the “Make in India” promotion, the Government of India has diagnosed twenty-five precedence sectors that will be offered properly. Foreign direct investment (FDI) in India has received a the spian enhancement from instigating the Make in India scheme, as per the most recent Economic Survey. The investment climate in India has improved. Intending to attract and promote FDI, the Government of India (GoI) has put in place a policy framework on FDI, which is transparent, predictable, and easily comprehensible. India received FDI Inflow during 2014-2018 of US$ 223. Sectors such as Services, Computer software & hardware, Telecommunications, Trading, and Construction attracted the highest FDI. Most of the foreign countries like to invest in India during the 2018-19, India received the maximum FDI equity in flows from Mauritius, followed by Singapore and Japan. Total FDI investments in India during 2018-2019 are 62,001 cores, Government of India new polices to promote the FDI impact top 10 sectors services sector, Telecommunications, Computer software and hardware, Construction Development, Trading, Automobile Industry, Chemicals, Drugs & Pharmaceuticals, Construction (Infrastructure) Activities, Power. Most as of late, the all-out FDI value inflows for April 2019 contacted 36,463 crores. India During 2018-2019, India got the greatest FDI value inflows from Mauritius (Rs 57,139 crore), trailed by Singapore (112,362 crores), Netherlands (9,423 crores), USA (10,119 crores), and Japan (3, 28 4crore). This paper aims at explaining the impact of Make in Indian Foreign Direct Investment in various aspects.

Consequences of International Financial Reporting Standards Adoption in Africa: Evidence From Foreign Direct Investment

International Financial Reporting Standards (IFRS) Adoption makes financial reporting transparent by enhancing the comparability and the quality of the financial information which reduces the transaction cost and attract foreign direct investment (FDI). This consequently facilitates the effective economic decisions of investors and other market participants. In light of this, many developing countries, in Africa, have resorted to the mandatory-IFRS adoption to enhance the inflow of foreign capital. The study, therefore, aims at finding out the effect of IFRS adoption on FDI inflows. We investigate whether the adoption of IFRS really enhances the inflow of foreign direct investment in developing countries. We use the Fixed Effect regression model, and the sample consisted of 45 (30 IFRS adopted and 15 IFRS non-adopted) African countries from the period of 2000 to 2017. The evidence from our study shows that the adoption of IFRS leads to increased FDI inflows. Most research on international financial reporting standard and foreign direct investment did not control the time period. By conducting further analysis using the difference-in-difference analysis to control the time period, our results highlighted that FDI inflows is higher after the adoption of IFRS. The increase in the value of FDI is influenced by the time period.

Promoting Foreign Direct Investment in the Indo-Pacific Region: Scope and Opportunities

Indo-Pacific construct has picked up a motivating pace in recent years. Several countries across the world have shown their interest in joining the Indo-Pacific region. Indo-Pacific region has been the world’s leading source and destination of foreign investment. This article analyses the trends in investment, bilateral and multilateral investment engagements and investment barriers and presents a way to promote foreign direct investment (FDI) in the Indo-Pacific region. It also examines India’s investment relations with some of the Indo-Pacific countries. Further, it looks into the inter-linkages between FDI and global value chain, given that multinational firms play a significant role in bringing international sourcing, technology sharing, and production networking across countries.

Effects of International Financial Reporting Standards (IFRS) on Foreign Direct Investment: A Study of Nigerian Commercial Banks

The study examined the effect of adopting International Financial Reporting standards (IFRS) on Foreign Direct Investment (FDI) inflow into Nigeria. The objective of the study was to assess whether the adoption of IFRS has significant impact on Foreign Direct Investment (FDI) inflow into Nigeria. Three null hypothesis were stated thus: Non-current assets disclosed by banks adopting IFRS has no significant effect on value of FDI inflow; Profit after tax of Nigerian banks adopting IFRS has no significant effect on value of FDI inflow; Total assets disclosed by banks adopting IFRS has no significant effect on value of FDI. Secondary data were collected from published financial statements of three commercial banks under study. The regression analysis based on ordinary least (OLS) was used to test our null hypotheses. The findings of the study revealed that contrary to general expectation, the value of FDI inflow into the sector did not significantly increase after the adoption of IFRS. On the basis of the findings, we recommend amongst others that the addition to encouraging IFRS adoption, Nigeria government should create enabling environment to attract foreign direct investment into the economy.

Foreign Direct Investment and Indian Economic Growth

The present study investigates the impact of the foreign direct investment (FDI) on Indian economic development during the period 1981 to 2016. The annual data of Index of Industrial Production (IIP) have been considered as a proxy of Indian economic development. The estimated results of the Johansen's cointegration test and vector error correction model (VECM) suggest that there exists a long-run positive cointegrating relationship between FDI and IIP. The result of the VECM indicates that any change in the value of FDI causes to change the value of IIP in the long run. But in the long run, change in IIP does not have any causal effect on FDI. The results of short-run causality test among the variables based on Granger causality test shows a bidirectional short-run causal relationship between FDI and IIP, that is in short-run the value of FDI significantly affect the movement of IIP and vice versa. So, with the help of the estimated results, the study concludes that FDI plays a crucial role in enhancing the economic growth and development of the country, as the flow of FDI leads to improve the economic development indicator used in this study.