scholarly journals Does foreign direct investment cause financial sector development – evidence from an emerging economy

2019 ◽  
Vol 12 (1) ◽  
pp. 33-55
Author(s):  
John Kwaku Amoh ◽  
Abdul-Mumuni Abdallah ◽  
Richard Amankwa Fosu
Keyword(s):  
Foreign Direct Investment ◽  
Emerging Economies ◽  
Direct Investment ◽  
Structural Equation ◽  
Financial Institution ◽  
Exploratory Research ◽  
Investment Climate ◽  
Fdi Inflows ◽  
Cascading Effects ◽  
Development Indicators

AbstractThe aim of this exploratory research is to examine the foreign direct investment (FDI) – financial development (FD) nexus and to analyse the strength of relationships among FDI measures. The study employed structural equation modelling (SEM) on selected data from the World Development Indicators (WDI) from 1979 to 2016 to achieve the modest goal of this paper. The study established that FDI inflows are precursors of a vibrant and well-developed financial institution in emerging economies. We also found positive and negative correlations amongst the FDI measures, which suggest they move pari passu in stimulating the FD of an economy. A notable feature of this study is in the employment of SEM empirical strategy to shed light on the FDI-FI nexus. The study concluded that emerging economies must focus on the creation of a congenial investment climate to attract FDI inflows, which pivots robust financial institutions because of their cascading effects on the overall economy.

scholarly journals Foreign direct investment and the investment climate in South-East Europe

2004 ◽  
Vol 49 (163) ◽  
pp. 71-92 ◽  
Author(s):  
Slavica Penev ◽  
Matija Rojec
Keyword(s):  
Foreign Direct Investment ◽  
Regional Integration ◽  
Direct Investment ◽  
Investment Climate ◽  
The European Union ◽  
Fdi Inflows ◽  
East Europe ◽  
The Third ◽  
South East Europe ◽  
Countries In Transition

Foreign direct investment (FDI) has played an important role in the restructuring of economies of the new member countries of the European Union. FDI levels in South East Europe (SEE) are much lower than in the CEE countries in transition, what reduces the potential restructuring impact of FDI in SEE. The issue here is, how to strengthen FDI inflows in SEE. Along these lines, the aim of the paper is to analyze the countries of SEE as a location for FDI. In the first section we present the economic situation and trends in SEE countries, which are of specific relevance for investors from abroad. Second section deals with FDI trends and situation in SEE countries while the third section analyses individual elements of investment climate in SEE countries. In section four we argue that EU and regional integration processes in SEE are important for making the region a more attractive location for FDI.

scholarly journals Profiling sectoral risks of foreign direct investment (FDI) in Africa for the first decade of the 21st century

2017 ◽  
Vol 9 (1) ◽  
pp. 153-173 ◽  
Author(s):  
Zahné Coetzee ◽  
Henri Bezuidenhout ◽  
Carike Claassen ◽  
Ewert Kleynhans
Keyword(s):  
Foreign Direct Investment ◽  
Direct Investment ◽  
Structural Equation ◽  
Equation Model ◽  
Vital Role ◽  
African Countries ◽  
Fdi Inflows ◽  
Government Effectiveness ◽  
The Relationship ◽  
Risk Pattern

Despite Africa’s strong foreign direct investment (FDI) performance since 2000, the majority of FDI inflows have been directed to a few selected countries. As investors face many risks when investing in developing countries, it is argued that risk perception plays a vital role in the FDI inflows into Africa. This article focuses on the relationship between risk and FDI. A structural equation model is used to analyse this relationship with a dataset of ten risk categories and FDI data from 42 African countries. The study focuses on four sectors, namely metals, automotive, communications and real estate. Overall, results indicate that government effectiveness and legal and regulatory risks produce the biggest concern for investors. The conclusion is that each sector’s risk pattern regarding FDI differs. The most important empirical results indicated that African countries should focus more on government effectiveness, stability and transparency to attract the levels of FDI required to stimulate economic growth.

scholarly journals THE ROLE OF INTERNATIONAL COMMERCIAL ARBITRATION IN ENHANCING FOREIGN DIRECT INVESTMENT: LESSONS FOR ALGERIA

2020 ◽  
Vol 11 ◽  
pp. 225-243
Author(s):  
Takyeddine Hathout ◽  
Rohana Abdul Rahman ◽  
Mohd Zakhiri Md. Nor
Keyword(s):  
Foreign Direct Investment ◽  
Emerging Economies ◽  
Direct Investment ◽  
Legal Framework ◽  
Economic Activities ◽  
Commercial Arbitration ◽  
Foreign Investors ◽  
Fdi Inflows ◽  
International Commercial Arbitration ◽  
International Investors

Following the upsurge and development in the globalized and emerging economies, commercial misunderstanding and disputes transcending national borders may also be on the rise. Such disputes can hamper the economic activities and operation within those emerging economies, in particular those activities related to the foreign direct investment. National legal mechanism may not be attractive to international investors. Instead, international commercial arbitration (ICA) could be a preferred choice by foreign investors through which contractual disputes can be resolved via independent forum because it helps to foster market efficiency, facilitate foreign direct investment and protect the interest of foreign investors. To offer insights on this issue theoretically and empirically, this paper presents a logic-based and empirically based conceptual discussion to investigate the influence of ICA on FDI, in particular its application in the context of Algeria and the importance of domestic courts’ execution of arbitral awards. The paper finds that ICA is indispensable to contractual conflict resolution and can consequently assists FDI inflows into the country that entrenches it. Algeria may increase FDI inflows by strengthening the legal framework for arbitration through the enhancement of national laws relating to ICA and guaranteeing their effective execution and enforcement by local judicial system.

scholarly journals THE IMPACT OF REPETITIVE XENOPHOBIC ATTACKS ON FUTURE FOREIGN DIRECT INVESTMENT: A CASE OF SOUTH AFRICA

2021 ◽  
pp. 14-20
Author(s):  
Wellington Garikai Bonga
Keyword(s):  
Economic Growth ◽  
South Africa ◽  
Foreign Direct Investment ◽  
Direct Investment ◽  
Capital Inflows ◽  
Foreign Direct Investments ◽  
Investment Climate ◽  
Fdi Inflows ◽  
Long Term Impact ◽  
The Impact

The debate of the link between xenophobia and importance of foreign direct investment is of interest. A phrase says it all, “One cannot want foreign money and hate foreign businesses at the same time.” Does South Africa, as a country, love foreign investment, and by extension, foreign investors? A ‘yes’ and a ‘no’ answer will do for this question. Foreign direct investments are the most desirable form of capital inflows to emerging and developing countries. Many benefits are linked to accrue to a nation because of FDI inflows. FDI is climatic sensitive, and usually goes where it is wanted most and where conducive environment prevails. The South African nation is dominated by unending violence that also targets foreigners including their businesses. Effective policies to curb xenophobia seems to be lacking. There exist xenophobia denialism among the political leaders, making it more difficult to halt the problem. Letting the nation continue turning into a hostile destination for foreigners may pose a great investment challenge in the longer term. The path that South Africa is walking today, of protecting and failing to address issues of xenophobia, have a long term impact to investment in the country. Conflicts and violence attacks, hence xenophobia, continue to affect FDI flows several years into the future. The trend of net FDI has already shown a downward trend that may be attributed to issues of unrest persistent in the economy. The study strongly indicate that repetitive xenophobic attacks significantly impact future FDI inflows negatively. Immediate action is required to minimize the damage caused by xenophobia in the country. Investment climate restoration is required to ensure favorable economic growth path for the country. KEYWORDS: Economic Growth, Foreigners, Foreign Direct Investment, Instability, Investment, Investment Climate, Socio-economic Development, Violence, Xenophobia, South Africa

PFI OECD - Framework for Strong investment Policy

2015 ◽  
pp. 151-156
Author(s):  
A. Koval
Keyword(s):  
Sustainable Development ◽  
Foreign Direct Investment ◽  
Direct Investment ◽  
Comprehensive Approach ◽  
Investment Policy ◽  
Policy Framework ◽  
Investment Climate ◽  
Systematic Monitoring ◽  
Investment Tool ◽  
National Investment

The improving investment climate objective requires a comprehensive approach to the regulatory framework enhancement. Policy Framework for Investment (PFI) is a significant OECD’s investment tool which makes possible to identify the key obstacles to the inflow foreign direct investment and to determine the main measures to overcome them. Using PFI by Russian authorities would allow a systematic monitoring of the national investment policy and also take steps to improve the effectiveness of sustainable development promotion regulations.

Economic and legal instruments for the realization of foreign direct investment in infrastructure sectors of the economy

2020 ◽  
pp. 47-55
Author(s):  
Orshanska Marіana
Keyword(s):  
Foreign Direct Investment ◽  
Direct Investment ◽  
High Growth ◽  
Well Being ◽  
Gradual Improvement ◽  
Fdi Inflows ◽  
Investment Projects ◽  
Analysis And Synthesis ◽  
High Level ◽  
Fdi Attraction

The purpose of the article is to determine the nature, characteristics and keyproblems of the main types of economic and legal instruments for the realizationof foreign direct investment (FDI). the methodological basis of the study is asystematic approach to the processing and compilation of statistics and indicators,as well as methods for their comparison, analysis and synthesis and a method offorecasting decisions on the use of investment potential to increase the attractivenessand volume of FDI attraction. The scientific novelty of the research lies in theanalysis of greenfield and brownfield strategies as the main forms of FDIimplementation, the disclosure of the content and interpretation of data on thereal state of FDI attraction, the search for opportunities to improve the investmentclimate and effective mechanisms for attracting foreign investors. conclusions. Itis confirmed that the investment attractiveness and rating of the country in theinternational market are the main factors for attracting investors. Inaccessibleinfrastructure, inefficient judicial system, high level of corruption and imperfectlegislation are the main obstacles that need to be overcome in order to attractforeign investors’ funds, providing a full package of assistance and support ateach stage of the implementation of investment projects. Greenfield and brownfield(M&A) are the most effective forms of FDI in order to achieve high growth ratesof the domestic economy, improve the level of population well-being andinternationally enter Ukraine. An analysis of the statistics on the effectiveness ofinnovative enterprise development projects, the characteristics of economic andlegal instruments indicate the gradual improvement of the investment climate andthe promotion of FDI inflows into the region’s economy through the implementationof greenfield and brownfield strategies. Examples of effective implementation ofthese strategies in the creation of new enterprises, companies of foreignrepresentation, which are expanding their capacity and entering new domesticmarkets are given. Examples of the brownfield strategy have been analyzed torestart existing and high-quality structural and organizational changes in inefficiententerprises, which have given impetus to improving the economic environment,investment attractiveness of the economy of the region and the country as a whole.

An Empirical Investigation of India’s Outward Foreign Direct Investment: A Macro Perspective

2019 ◽  
Vol 5 (2) ◽  
pp. 79-88
Author(s):  
Dikshita Kakoti
Keyword(s):  
Foreign Direct Investment ◽  
Direct Investment ◽  
Real Effective Exchange Rate ◽  
Outward Foreign Direct Investment ◽  
Fdi Inflows ◽  
Long Run ◽  
Increasing Trend ◽  
Effective Exchange ◽  
Short Run ◽  
Effective Exchange Rate

Since 1990, globalization of Indian economy led to a speedy growth of foreign direct investment (FDI) inflows and simultaneously outward foreign direct investment (OFDI) also shows an increasing trend. However, India’s OFDI has attracted a little attention from the researchers and they have considered the OFDI in terms of commitments or approved equities. The motivation of this article is to investigate the India’s macro factors influencing actual OFDI flows from India by empirically recognizing four factors, namely gross domestic product, inward FDI, real effective exchange rate, and real interest rate over the period 1980–2016. The study has used Augmented Dicky-Fuller (ADF) and Phillips–Perron (PP) Unit root tests for checking the stationarity of the variable of the model. Later on, autoregressive distributive lag (ARDL) model and error correction mechanism is used for testing the long-run as well as short-run dynamics of the model. The result shows that all the selected variables have positive and significant influence on India’s outward investment flows.

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