Determinant of Foreign Direct Investment into Developing Countries in the Circumstance of Globalization

Upravlenie ◽  
10.12737/8791 ◽  
2015 ◽  
Vol 3 (1) ◽  
pp. 76-79
Author(s):  
Данг ◽  
May An Dang
Keyword(s):  
Economic Growth ◽  
Developing Countries ◽  
Foreign Direct Investment ◽  
Intellectual Property ◽  
Foreign Investment ◽  
Direct Investment ◽  
Education Level ◽  
Property Right ◽  
Intellectual Property Right ◽  
The World

Foreign investment, especially FDI plays a role more and more important for economic growth and international integration. However, the flux of FDI in the world is influenced by many determinants such as the population, GDP, the education level, the law on intellectual property right… Analyzing these determinants of FDI could contribute to find out the trend of global FDI and the solutions for developing countries to attract more FDI for economic growth.

scholarly journals Impact of Intellectual Property Rights Institutional Quality and Financial Development on Foreign Direct Investment - Evidence from Developing Countries

2019 ◽  
Vol 7 (2) ◽  
pp. 11-22
Author(s):  
Palwasha Farooq Farooq ◽  
◽  
Arshad Hassan ◽  
Junaid Ahmed ◽  
◽  
...  
Keyword(s):  
Developing Countries ◽  
Foreign Direct Investment ◽  
Intellectual Property ◽  
Financial Development ◽  
Direct Investment ◽  
Institutional Quality ◽  
Property Right ◽  
Intellectual Property Right ◽  
The Impact ◽  
Patent Right

The current study explores the impact of intellectual property right, financial development and institutional quality on foreign direct investment. Data of patent index were used as a proxy of intellectual property right. Financial development index and institutional quality variables were taken from ICRG for the period of 1980- 2016, by applying pooled OLS, fixed test. Sample of 123 developing countries data set were used. The results are consistent with theory of OLI presented by Dunning 1979. The results explain more than 70 percent of FDI significance level is explained by these proxies. The only paper that identifies Patent right index is by Park (2008) that took patent index from 1960-2005. Furthermore, work is under taken where the patent right variables are taken as independent variables. On the contrary previous studies have empirically examined the effect of patent proxy effect on the creativity, innovations and the dissemination of the technology transfer. This study differs because patent index is included with institutional quality variables. Beside this the high level financial development is a catalyst in attracting FDI. Moreover, the FDI is higher in military regime, which is due to higher level of dis stability regime in the country. However, results shows that developing countries can improve regulatory quality by maintaining bureaucracy and accountability to enable them to take advantage from the external finance which further boosts the growth of economy

scholarly journals Relationship Between Foreign Direct Investments and Economic Growth: The Azerbaijan Sample

2017 ◽  
Author(s):  
Serap Ürüt Kelleci ◽  
Emine Fırat
Keyword(s):  
Economic Growth ◽  
Developing Countries ◽  
Foreign Direct Investment ◽  
Soviet Union ◽  
Direct Investment ◽  
Developed Countries ◽  
General Information ◽  
Economic Effects ◽  
Foreign Direct Investments ◽  
The World

Today, foreign direct investment is very important for both developed and developing countries. It is seen as an opportunity to overcome the inadequacy of capital, especially in developing countries. It is expected that these investments will make a serious contribution in solving the problems related to the balance of payments, in the realization of the investments that will enable the growth of the economies, in increasing the employment. The study will examine the size, development and effects of foreign capital in Azerbaijan economy. Azerbaijan, which is also known as transition economies, has gone from the Soviet Union in 1991 to regulating its economic structure from the beginning. At this point, they have undertaken various reforms to improve their inadequate investment capabilities and to attract foreign direct investment into the country. In this respect, they tried to have a share of this great pasty shared by the developed countries in the world. In this study, firstly foreign direct investments and economic effects will be examined. Then, general information about Azerbaijani economy will be given and the dimensions and effects of foreign direct investments in Azerbaijan will be revealed. After the literature review on the subject has been made, the relationship between economic growth and foreign direct investment in Azerbaijan will be empirically analyzed. The figures for Azerbaijan during the period 1995-2015 were obtained from the World Bank.

scholarly journals Foreign Direct Investment, Economic Freedom and Economic Growth: Evidence from Developing Countries

2016 ◽  
Vol 8 (11) ◽  
pp. 200 ◽  
Author(s):  
Md. Shakib Hossain
Keyword(s):  
Economic Growth ◽  
Developing Countries ◽  
Foreign Direct Investment ◽  
Standard Deviation ◽  
Poisson Regression ◽  
Direct Investment ◽  
Economic Freedom ◽  
Random Effect ◽  
Estimating Equation ◽  
Generalized Estimating Equation

<p class="Default">This paper has explores the interplay between economic freedom, foreign direct investment and economic growth using panel data analysis for a sample of 79 developing countries from 1998 to 2014 by considering the level of economic freedom, as provided by the “Heritage Foundation”. Panel unit root, pedroni residual co-integration test, generalized least square (GLS), feasible GLS (FGLS), pooled OLS, random effect, fixed effect, poisson regression, prais-winsten, generalized method of movement (GMM) and generalized estimating equation (GEE) methods have used to estimates the relationship. According to the OLS and generalized method of movement the coefficient implies that a one standard deviation improvement in business freedom, trade freedom, size, investment freedom, property rights, freedom from corruption, labor freedom, financial freedom, fiscal freedom, monetary freedom increases FDI by 21.4%, 15.6%, 21.6%, 17.5%, 11.55, 9.1%, 6.9%, 8.5%, 7.4%, 10.3% and 56.1%, 45.3%, 58.3%, 51.6%, 33.7%, 39.2%, 47.4%, 41.6%, 32.5%, 38.5% points respectively and  for the economic variable ,the coefficient implies that a one standard deviation improvement in GDPG and GDPPC increases FDI by 24.1%, 17.4% and 30.2%, 33.4% points respectively. By using the other method like random effect, fixed effect, poisson regression, prais-winsten and generalized estimating equation (GEE) method explores that economic freedom in the host country is a positive determinants of FDI inflows in developing countries and also the result suggests that foreign direct investment is positively correlated with the economic growth in the host countries.</p>

scholarly journals Effective factors to encourage the foreign direct investment in Iraq

2018 ◽  
Vol 162 ◽  
pp. 02038
Author(s):  
Shahla Mohammad Ali
Keyword(s):  
Foreign Direct Investment ◽  
Intellectual Property ◽  
Property Rights ◽  
Intellectual Property Rights ◽  
World Bank ◽  
Direct Investment ◽  
Banking System ◽  
Effective Factors ◽  
World Bank Report ◽  
The World

Foreign direct investment in Iraq cannot take its complete role for different reasons, such as: Lack of security, Corruption, Lack of Transparency, Unequipped banking system, undeveloped arbitration law, Intellectual Property Rights (IPR) issue, and internal disputes over oil rights. It was found that Iraq rates as one of the worst places in the world to do business, languishing at 166 out of 183 countries, according to a World Bank report and for starting a business Iraq ranks even lower

scholarly journals Dynamic Causal Relationships among GDP, Exports, and Foreign Direct Investment (FDI) in the Developing Countries

2013 ◽  
Vol 14 ◽  
pp. 1-19 ◽  
Author(s):  
Mohsen Mehrara ◽  
Amin Haghnejad ◽  
Jalal Dehnavi ◽  
Fereshteh Jandaghi Meybodi
Keyword(s):  
Economic Growth ◽  
Developing Countries ◽  
Foreign Direct Investment ◽  
Strong Evidence ◽  
Direct Investment ◽  
The Other ◽  
Fdi Inflows ◽  
Long Run ◽  
Short Run ◽  
Growth Hypothesis

Using panel techniques, this paper estimates the causality among economic growth, exports, and Foreign Direct Investment (FDI) inflows for developing countries over the period of 1980 to 2008. The study indicates that; firstly, there is strong evidence of bidirectional causality between economic growth and FDI inflows. Secondly, the exports-led growth hypothesis is supported by the finding of unidirectional causality running from exports to economic growth in both the short-run and the long-run. Thirdly, export is not Granger caused by economic growth and FDI inflow in either the short run or the long run. On the basis of the obtained results, it is recommended that outward-oriented strategies and policies of attracting FDI be pursued by developing countries to achieve higher rates of economic growth. On the other hand, the countries can increase FDI inflows by stimulating their economic growth.

scholarly journals INVESTASI ASING LANGSUNG DAN PERTUMBUHAN EKONOMI DI WILAYAH ASEAN PERIODE 2004-2016

2019 ◽  
Vol 23 (2) ◽  
pp. 57-66
Author(s):  
Aditya Febriananta Putra ◽  
Suyanto . ◽  
Irzameingindra Putri Radjamin
Keyword(s):  
Economic Growth ◽  
Developing Countries ◽  
Foreign Direct Investment ◽  
Significant Role ◽  
Direct Investment ◽  
Negative Impact ◽  
Positive Impact ◽  
Accelerate Development ◽  
Fixed Capital Formation

Exertions to accelerate development carried out by developing countries in general are oriented towards improving or improving people’s lives. Developing countries are characterized as countries that lack capital, savings and investment. The role of Labor has a significant effect but has a negative impact on economic growth. Agriculture and Service also performance a significant role, despite having a positive impact on economic growth. While other variables, namely Fixed Capital Formation, Foreign Direct Investment, Export, Manufacture, and Fertility showed insignificant results on economic growth.

scholarly journals Impact of foreign direct investment, remittances and official development assistance on economic growth: panel data approach

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Amna Zardoub ◽  
Faouzi Sboui
Keyword(s):  
Economic Growth ◽  
Developing Countries ◽  
Foreign Direct Investment ◽  
Panel Data ◽  
Direct Investment ◽  
Development Assistance ◽  
Business Environment ◽  
Official Development Assistance ◽  
Financial Flows ◽  
Content Type

PurposeGlobalization occupies a central research activity and remains an increasingly controversial phenomenon in economics. This phenomenon corresponds to a subject that can be criticized through its impact on national economies. On the other hand, the world economy is evolving in a liberalized environment in which foreign direct investment plays a fundamental role in the economic development of each country. The advent of financial flows – FDI, remittances and official development assistance – can be a key factor in the development of the economy. The subject of this article is to analyses the effect of financial flows on economic growth in developing countries. Empirically, different approaches have been employed. As part of this work, an attempt was made to use a panel data approach. The results indicate ambiguous effects and confirm the results of previous work.Design/methodology/approachThe authors seek to study the effect of foreign direct investment, remittances and official development assistance (ODA) and some control variables i.e. domestic credit, life expectancy, gross fixed capital formation (GFCF), inflation and three institutional factors on economic growth in developing countries by adopting the panel data methodology. Then, the authors will discuss empirical tests to assess the econometric relevance of the model specification before presenting the analysis of the results and their interpretations that lead to economic policy implications. As part of this work, the authors have rolled panel data for developing countries at an annual frequency during the period from 1990 to 2016. In a first stage of empirical analysis, the authors will carry out a technical study of the heterogeneity test of the individual fixed effects of the countries. This kind of analysis makes it possible to identify the problems retained in the specific choice of econometric modeling to be undertaken in the specificities of the panel data.FindingsThe empirical results validate the hypotheses put forward and indicate the evidence of an ambiguous effect of financial flows on economic growth. The empirical findings from this analysis suggest the use of economic-type solutions to resolve some of the shortcomings encountered in terms of unexpected effects. Governments in these countries should improve the business environment by establishing a framework that further encourages domestic and foreign investment.Originality/valueIn this article, the authors adopt the panel data to study the links between financial flows and economic growth. The authors considered four groups of countries by income.

scholarly journals FEATURES OF GLOBAL INVESTMENT POLICY: MODERN TRENDS AND PROSPECTS

2019 ◽  
pp. 142-148
Author(s):  
Larisa Germanovna Chuvakhina
Keyword(s):  
Foreign Direct Investment ◽  
Foreign Investment ◽  
Direct Investment ◽  
World Economy ◽  
International Investment ◽  
Investment Policy ◽  
Investment Promotion ◽  
The Us ◽  
The World

The article highlights the current problems of investments in the development of the world economy, when international investment needs are significantly high. The priority is given to the issues of investment resources for achieving the goals of sustainable development of the world economy. It has been stated that for creating the effective economic policy, the countries need to attract foreign investment. The current trends in the development of global market for foreign direct investment flows are examined. The flows of global foreign direct investment in 2017-2018 are analyzed. Special attention is given to the study of the US investment policy. The reduction in US investments into the Russian economy in terms of the sanctions policy against Russia is marked. The changes in the investment policy of the administration of D. Trump in terms of strengthening American protectionism are underlined. The issues of US-EU investment cooperation are considered. The role of the US Federal Reserve in regulating the activities of foreign companies in the US market is defined. The main decisions taken at the X World Investment Forum of the United Nations Conference on Trade and Development in October, 2018 are considered. The role of investment promotion agencies is defined as one of the tools to attract foreign investments into the country's economy. The decrease in the level of international investment and increased competition between countries for attracting foreign investment is stated. The study confirms that the investment attractiveness of the country, stability of the national financial system, and legal security of business play a decisive role in attracting foreign direct investment.

scholarly journals Regional Model Bit’s : A New Down For the Developing Countries

2021 ◽  
Vol 4 (2) ◽  
pp. 114-121
Author(s):  
Abdallah Mohamed Othman El Nofely ◽  
Rehna Gul
Keyword(s):  
Economic Growth ◽  
Developing Countries ◽  
Foreign Direct Investment ◽  
Direct Investment ◽  
Regional Model ◽  
Economic Sector ◽  
Gear Up ◽  
Advance Technology ◽  
Host Countries ◽  
Scale Down

Foreign direct investment (FDI) plays a crucial role in the economic sector, particularly in developing countries. BIT lays down instrumental principles which help to protect investors’ establishments in host states, by inter alia encouraging prompt compensation in case of expropriation. Governments need FDIs to gear up their economic growth, advance technology, and scale down unemployment. Most scholarly writings are in favor that BIT is a necessary tool for promoting FDIs, however this study takes a different approach and categorically unveils the draw backs of BIT in developing countries by highlighting some of the contentious provisions that have sparked unprecedented legal, economic, sociopolitical and diplomatic strife between the host countries, investors and investors’ home countries. Therefore, the author proposes development for regional Model BITs that would go in line with national laws to curtail the persisting sovereignty and socio-economic challenges.

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