Foreign capital inflows and economic growth in developed and emerging economies: A comparative analysis

To examine the impact of foreign capital inflows on Taiwan’s economy after internet bubbles of 2000, this study adopts data from the first quarter of 2001 to the second quarter 2015 to test if foreign capital inflows have positive impacts on Taiwan’s economic growth. This study also uses program trading and aims to prove that with financial liberalizations, the investment efficiency of foreign institutional investors is better than domestic institutional investors.The results from the error correction model shows that capital formation, domestic savings and foreign direct investment all have positive relationships with the real economic growth. However, the rate of financing and foreign debt and depreciation all have negative relationships with the real economic growth. The results are all statistically significant. Hence, they do not completely support the hypothesis that foreign capital inflows are beneficial for economic growth.Moreover, this study proves that the futures market in Taiwan is not strong-form market efficient. This result provides support for the hypothesis that the investment efficiency of foreign institutional investors is higher than that of domestic institutional investors. Investors can therefore raise their investment performance by following the investment strategies of foreign institutional investors.

Download Full-text

Which Form of Foreign Capital Inflows Enhance Economic Growth? Empirical Evidence in Sub-Saharan Africa

Asian Economic and Financial Review ◽

10.18488/journal.aefr/2016.6.10/102.10.557.570 ◽

2016 ◽

Vol 6 (10) ◽

pp. 557-570 ◽

Cited By ~ 2

Author(s):

Frank Adusah Poku

Keyword(s):

Economic Growth ◽

Empirical Evidence ◽

Foreign Capital ◽

Capital Inflows ◽

Sub Saharan Africa ◽

Foreign Capital Inflows ◽

Sub Saharan

Download Full-text

The Effects of Foreign Capital Inflows on Economic Growth in East African Community (EAC)

International Area Studies Review ◽

10.21212/iasr.24.3.5 ◽

2020 ◽

Vol 24 (3) ◽

pp. 101-127

Author(s):

Sindayihebura Janviere ◽

Utai Uprasen

Keyword(s):

Economic Growth ◽

Foreign Capital ◽

Capital Inflows ◽

East African ◽

East African Community ◽

African Community ◽

Foreign Capital Inflows

Download Full-text

Foreign Capital and Economic Growth

Foreign Trade Review ◽

10.1177/0015732515880303 ◽

1988 ◽

Vol 23 (3) ◽

pp. 302-310

Author(s):

Raj Aggarwal

Keyword(s):

Economic Growth ◽

Developing Countries ◽

Global Change ◽

Foreign Capital ◽

Development Aid ◽

Capital Inflows ◽

Private Capital ◽

Competitive Markets ◽

Poor Countries ◽

Foreign Capital Inflows

In the current environment of significant global change, how can declining levels of development aid and private capital inflows be best used to promote economic growth in the developing countries? This question is addressed here and traditional analysis of this topic is complemented by taking a perspective that focuses on the limitations of how development aid and foreign capital inflows are usually allocated. It is suggested here that poor countries can benefit from a greater use of competitive markets to allocate development aid and private capital inflows.

Download Full-text