Net profit flow per country from 1980 to 2009: The long-term effects of foreign direct investment

Investment Climate and Foreign Direct Investment Trends in the South Caucasus and Central AsiaThis paper analyzes and compares investment climates and trends in the South Caucasus and Central Asia. The analyses and comparisons were conducted in view of the impacts of transitional progress, economic development, and the energy reserves from these regions on the inflow of foreign direct investment. Improvement of the investment climate by accelerating the transition process and reducing investment risks can be seen as the most important determinants of FDI inflows into the countries of these two regions. Structural diversification of South Caucasian and Central Asian natural resource-based economies would be essential in ending dependence on the energy and mining sectors and would have positive long-term effects on economic growth and the investment climate, and attract other, additional types of FDI.

Download Full-text

The Spillover Effects from Foreign Direct Investment (FDI) on Labor Productivity: Evidence from Indonesian Manufacturing Sector

Jurnal Ekonomi dan Kebijakan Publik ◽

10.22212/jekp.v10i1.1158 ◽

2019 ◽

Vol 10 (1) ◽

pp. 19-30

Author(s):

Riesta Karentina

Keyword(s):

Foreign Direct Investment ◽

Labor Productivity ◽

Direct Investment ◽

Spillover Effects ◽

Long Term Effects ◽

Short Term ◽

Domestic Firms ◽

Fdi Spillovers ◽

The Impact

Despite growing concern regarding the productivity benefits of foreign direct investment (FDI), few studies have been conducted on the impact of FDI spillovers on domestic firms’ labor productivity in Indonesia. This study aims to do three things. First, it examines the effect of FDI spillovers on domestic firms’ productivity. Second, it investigates the short-term and long-term effects of FDI spillovers on domestic firms’ productivity. Third, it explores the impact of FDI spillovers on domestic firms’ productivity in different groups of industries based on their factor intensity. Micro-level panel data covering about 20,000 medium and large manufacturing establishments in each year over the period 2010 and 2014 was employed. This study suggests that, within the same industry, horizontal spillovers are associated with domestic firms’ productivity: this relationship is negative in the short-term but positive in the long-term. This study’s findings also demonstrate that, across industries, there are negative backward spillover effects on domestic firms’ productivity. In addition, this study points out that FDI spillovers affect domestic firms’ productivity effectively when they are capital-intensive. Therefore, the results imply the importance of maintaining a long-term perspective toward foreign-invested firms in Indonesia and the government needs to stimulate policies that can enhance domestic firms’ capacity to supply intermediate materials and capital to foreign firm in downstream market by truncating the technology gap between foreign and domestic firms.

Download Full-text

Dynamics of Foreign Direct Investment Manufacturing Sector in Indonesia

Jurnal Pendidikan Ekonomi Dan Bisnis (JPEB) ◽

10.21009/jpeb.007.2.7 ◽

2019 ◽

Vol 7 (2) ◽

pp. 153-164

Author(s):

Saparuddin Mukhtar ◽

Dicky Iranto ◽

Riana Raudha Adni

Keyword(s):

Foreign Direct Investment ◽

Interest Rates ◽

Direct Investment ◽

Manufacturing Sector ◽

Secondary Data ◽

Long Term Effects ◽

Short Term ◽

Long Run ◽

Negative Effect

This research was conducted to determine the short-term and long-term effects between Gross Domestic Product, Interest Rates, and Inflation on Foreign Direct Investment in the manufacturing sector for the period 2004-2017. Study applied VECM (Vector Error Correction Model), secondary data obtained from Bank Indonesia, BPS, and Bappenas. Based on the statistical results it can be concluded that: first, GDP has a positive and not significant effect in the short term, then in the long run, it has a negative effect toward FDI. Second, in the short term interest rates have a negative and not significant while in the long term interest rates have a negative and significant effect on FDI in the manufacturing sector. Lastly, inflation has a negative and insignificant effect, while, in the long-run inflation has a positive and significant effect on FDI in the manufacturing sector.

Download Full-text

FOREIGN DIRECT INVESMENT OUTFLOWS AND ENVIRONMENTAL POLLUTION: HIDDEN COINTEGRATION ANALYSIS FOR TURKEY

IEDSR Association ◽

10.46872/pj.235 ◽

2021 ◽

Vol 6 (11) ◽

pp. 165-182

Author(s):

Ahmet Emrah TAYYAR

Keyword(s):

Carbon Dioxide ◽

Foreign Direct Investment ◽

Environmental Pollution ◽

Environmental Quality ◽

Carbon Dioxide Emissions ◽

Direct Investment ◽

Causality Relationship ◽

Cointegration Relationship

The relationship between foreign direct investment, which is a type of cross-border and long-term investment, and environmental quality is a current issue that is heavily debated. Foreign direct invesments can ensure economic growth and development of countries, while also causing a change in environmental quality. In the research conducted, it is seen that changes in carbon dioxide emissions with foreign direct capital inflows are mainly investigated from the point of view of the host countries. However, foreign direct invesment outflows may have an impact on the environmental quality of the home country. Because foreign direct invesment outflows can enable the transfer of more environmentally friendly techonogies to the country and strengthen management skills. The impact of foreign direct investment outflows on the home country's environmental pollution is shaped by many factors (scale, technique, and composition effects). In addition to these effects, it is necessary to pay attention to the regional and sectoral distribution of capital outflows. The main aim of this study is to examine the links between Turkey's foreign direct invesment outflows and carbon dioxide emissions for the period 1990-2018. For this reason, a unit root test was applied to variables whose natural logarithm was taken. Tests showed that all series are stable of the same degree. Engle&Granger(1987) and Granger&Yoon(2002) tests were used to determine the cointegration relationship between variables. The crouching error correction model(CECM) was applied to determine the causality relationship. According to the results of the analysis; i) In terms of the Engle&Granger(1987) test, there was no long-term relationship between variables. ii) According to the Granger&Yoon(2002) test, it was determined that there is a bidirectional hidden cointegration relationship between the positive shocks of carbon dioxide emissions and negative shocks of foreign direct invesment outflows. iii) There is a bidirectional asymmetric causality relationship between the positive shocks of carbon dioxide emissions and the negative shocks of foreign direct invesment outflows. iv) It is observed that 1% negative shocks in foreign direct invesment outflows reduce positive shocks in carbon dioxide emissions by 0,26%. As a result, since negative situations in foreign direct invesment outflows have an effect on improving the quality of the environment, the environmental dimension should be taken into account in the policies to be made.

Download Full-text

India’s vaccine diplomacy brings money and influence

Emerald Expert Briefings ◽

10.1108/oxan-db260281 ◽

2021 ◽

Keyword(s):

United States ◽

Foreign Direct Investment ◽

Direct Investment ◽

Manufacturing Sector ◽

The United States ◽

Active Pharmaceutical Ingredients ◽

Content Type ◽

Pharmaceutical Ingredients ◽

The World

Significance Last week, its partners in the ‘Quad’ grouping -- the United States, Japan and Australia -- agreed to help increase its vaccine manufacturing and exporting capacity. Each of the Quad members is wary of China, which like India is gifting and selling coronavirus jabs around the world. Impacts India’s manufacturing sector will attract more foreign direct investment. Greater cooperation over supply chains will help strengthen India-Australia ties. Indian pharma will in the long term aim to ease dependence on imports of active pharmaceutical ingredients from China.

Download Full-text

Foreign Direct Investment Led Growth Hypothesis and Economic Development in Nigeria

Randwick International of Social Science Journal ◽

10.47175/rissj.v2i4.320 ◽

2021 ◽

Vol 2 (4) ◽

pp. 376-393

Author(s):

Ubong Edem Effiong ◽

Nora Francis Inyang

Keyword(s):

Economic Development ◽

Foreign Direct Investment ◽

Direct Investment ◽

Unit Root Test ◽

Secondary Data ◽

Short Term ◽

Causality Test ◽

Bounds Test ◽

Growth Hypothesis

This study was an inquiry into the nexus of the foreign-direct investment (FDI) led growth hypothesis, and how it translates into the development of the Nigerian economy as of 1970 – 2018. The study utilized secondary data from the ‘World Development Indicators’ which were analysed using the Bounds test for cointegration and the ‘autoregressive distributed lag (ARDL) approach to divulge both the short-term cum the long-term influence of foreign direct investment net inflow on ‘economic development’ of Nigeria. The Bounds test was conducted after the unit root test revealed that the variables were stationary at mixed order of level and first difference. The outcome of the ARDL Bounds test supported confirmation of long-term association among the variables. The ARDL short-run error correction showed that 14.62% of the instability in the model was corrected yearly. In the short-term, it was discovered that FDI wielded a deleterious and substantial weight on ‘economic development of Nigeria. Meanwhile, the long-term estimates indicated that FDI influenced economic development positively, though not in a significant manner. The Granger causality test supported the fact that FDI causes ‘economic development’ in Nigeria. Given this potential of FDI exerting a positive effect on ‘economic development’, the paper recommended that bottlenecks inherent in FDI influxes in the country should be removed so as to reap the fullest benefits of such inflows in Nigeria.

Download Full-text

Macroeconomic Variables and Foreign Direct Investment Inflows in Turkey

Signifikan Jurnal Ilmu Ekonomi ◽

10.15408/sjie.v8i2.10560 ◽

2019 ◽

Vol 8 (2) ◽

Author(s):

Saliha Meftah ◽

Abdelkader Nassour

Keyword(s):

Foreign Direct Investment ◽

Direct Investment ◽

Short Term ◽

Causality Test ◽

Correction Model ◽

Vector Error Correction ◽

Macroeconomic Variables ◽

Vector Error ◽

Causality Relationship

Foreign direct investment (FDI) is an essential factor in the development of a country. This study aims to examine what factors influence foreign direct investment. By using the vector error correction model, the research shows that there is a long-term causality relationship between exchange rates and inflation with FDI. However, in the short term, there are no variables that affect FDI. Besides, the Granger causality test shows causality in the direction of GDP and FDI, while other variables do not have causality. This research has implications for policymakers to pay attention to macroeconomic variables in increasing the flow of foreign direct investment.

Download Full-text

A time series analysis of determinants of FDI in Afghanistan: Which one matters the most, security or economic growth?

Journal of Emerging Economies and Islamic Research ◽

10.24191/jeeir.v6i2.8777 ◽

2018 ◽

Vol 6 (2) ◽

pp. 19

Author(s):

Abdul Fareed Delawari

Keyword(s):

Economic Growth ◽

Time Series ◽

Foreign Direct Investment ◽

Time Series Analysis ◽

Direct Investment ◽

Economic Factors ◽

Market Economic ◽

The Government ◽

The Relationship

Afghanistan has been practicing market economic system since 2002. Since then, the government has been initiating different policies and announced various incentives to attract foreign direct investment (FDI) to the country. However, the outcome has not been satisfactory due to several political and economic factors. This paper explores the relationship between security, economic growth and FDI in Afghanistan, using ARDL model. The paper covers a period from 2002 to 2016. The empirical results of this study show that there is a negative long-term relationship between security and FDI. Hence, the author concludes that, to attract FDI to the country, insuring security should be the top priority of the government of Afghanistan.

Download Full-text

DETERMINAN ALIRAN FOREIGN DIRECT INVESTMENT DI INDONESIA (PENDEKATAN MODEL DUNNING)

Media Trend ◽

10.21107/mediatrend.v11i2.1541 ◽

2016 ◽

Vol 11 (2) ◽

pp. 141

Author(s):

Claudia TeziaJanuarita Putri ◽

Regina Niken Wilantari

Keyword(s):

Foreign Direct Investment ◽

Direct Investment ◽

Descriptive Analysis ◽

Capital Inflow ◽

Economic Shocks ◽

Short Term ◽

Economic Openness ◽

Correction Model ◽

Investment Opportunities

Traffic capital across countries is one of investment opportunities from domestic and abroad to stimulate the economic growth of developing countries. Compared to other forms of capital, Foreign Direct Investment is the flow of capital is long-term and relatively not as vulnerable to economic shocks. The aim of this study is to see the performance of FDI movement as a capital inflow in Indonesia and to explores whether factors that affect FDI using Dunning’s ecletic model. This study focused on two basic analysis, descriptive analysis and quantitative analysis using the Error Correction Model (ECM). The results of short-term ECM estimate shows that FDI is influenced by inflation and the degree of economic openness. Furthermore, the result in the long term ECM estimate show that only variable that infrastructure does not significantly affect the movement of FDI in Indonesia.

Download Full-text

Bootstrap ARDL Test on the Relationship among Trade, FDI and CO2 Emissions: Based on the Experience of BRICS Countries

10.20944/preprints201911.0129.v1 ◽

2019 ◽

Author(s):

Fumei He ◽

Ke-Chiun Chang ◽

Min Li ◽

Xueping Li ◽

Fangjhy Li

Keyword(s):

Foreign Direct Investment ◽

Causal Relationship ◽

Co2 Emissions ◽

Direct Investment ◽

Export Trade ◽

Short Term ◽

Brics Countries ◽

The Relationship ◽

Cointegration Relationship

We used the Bootstrap ARDL method to test the relationship between the export trades, FDI and CO2 emissions of the BRICS countries. We found that China's foreign direct investment and the lag one period of CO2 emissions have a cointegration on exports. South Africa's foreign direct investment and CO2 emissions have a cointegration relationship with the lag one period of exports, and South Africa's the lag one period of exports and foreign direct investment have a cointegration relationship with the lag one period of CO2 emissions. But whether it is China or South Africa, these three variables have no causal relationship in the long-term. Among the variables of other BRICS countries, Russia is the only country showed degenerate case #1 in McNown et al. mentioned in their paper. When we examined short-term causality, we found that CO2 emissions and export trade showed a reverse causal relationship, while FDI and carbon emissions were not so obvious. Export trade has a positive causal relationship with FDI. Those variables are different from different situations and different countries.

Download Full-text