scholarly journals An Empirical Analysis of Foreign Direct Investment in Pakistan

2015 ◽  
Vol 10 (1) ◽  
pp. 5-15 ◽  
Author(s):  
Minhas Akbar ◽  
Ahsan Akbar
Keyword(s):  
Foreign Direct Investment ◽  
Direct Investment ◽  
Foreign Debt ◽  
Trade Openness ◽  
Law And Order ◽  
Policy Makers ◽  
Fdi Inflows ◽  
Domestic Capital ◽  
Fresh Perspective ◽  
Determinants Of Fdi

Abstract The aim of this paper is to explore the trends in Foreign Direct Investment (FDI) inflows in Pakistan and to identify the key determinants of FDI for the period of 2000-2013. The country experienced a continuous surge in FDI inflows from 2000-2008. On the contrary, the phase of 2009-2013 has been characterized by a persistent decline in FDI in Pakistan. This slump is mainly attributed to political and economic instability as wells as poor law and order situation in the country. Keeping these periods with differing results in perspective, multiple regression analysis is employed to empirically analyze the key determinants that are expected to explain variation in FDI in Pakistan. The selected variables were found significant determinants of FDI in Pakistan. Gross Domestic Product (GDP), degree of trade openness and regime of dictatorship have a significant positive effect on FDI. While, terrorism attacks foreign debt, exchange rate, political instability, and domestic capital formation are negatively significant determinants of FDI inflows in Pakistan. Considering the dynamic changes in the broad macro factors in economy, this study provides a fresh perspective on the factors that determine FDI in Pakistan. Moreover, the study findings provide important insights to policy makers to design policy measures that enhance FDI inflows in Pakistan.

scholarly journals The Evolving Framework of Determinants of Foreign Direct Investment: A Review of Literature

2018 ◽  
Vol 4 (02) ◽  
Author(s):  
Rahul Bhasin ◽  
K V Bhanu Murthy
Keyword(s):  
Foreign Direct Investment ◽  
Direct Investment ◽  
Developing Economies ◽  
New Technology ◽  
Trade Openness ◽  
Private Investment ◽  
Political Stability ◽  
Policy Makers ◽  
Managerial Skills ◽  
Determinants Of Fdi

The last two decades have witnessed intense competition among countries, particularly developing economies, to attract foreign direct investment (FDI). This is because FDI fills the gap between desired investment and domestic private investment and helps them to acquire new technology and managerial skills. This paper attempts to understand the evolution of FDI theory along with changes in the significance of determinants of FDI over a period of time. An analysis of the extant literature shows that factors such as market size and per capita incomes have remained important determinants of FDI decisions both traditionally as well as in contemporary times. However, some factors such as resources, trade openness and FDI openness have now become secondary factors influencing FDI. Other factors which were earlier secondary but have now gained prominence as FDI determinants are infrastructure; institutional factors such as corruption and political stability; and tax related variables. The above review provides us insights into the changing aspects of FDI decision-making and can provide useful inputs to policy makers regarding the areas which need focus for creating a congenial climate for FDI

scholarly journals Causal Links between Trade Openness and Foreign Direct Investment in Romania

2021 ◽  
Vol 14 (3) ◽  
pp. 90
Author(s):  
Malsha Mayoshi Rathnayaka Mudiyanselage ◽  
Gheorghe Epuran ◽  
Bianca Tescașiu
Keyword(s):  
Foreign Direct Investment ◽  
Direct Investment ◽  
Trade Openness ◽  
Test Procedure ◽  
Real Effective Exchange Rate ◽  
Foreign Direct Investments ◽  
Causality Test ◽  
Fdi Inflows ◽  
Distributed Lag ◽  
Long Run

In this increasingly globalized era, foreign direct investments are considered to be one of the most important sources of external financing for all countries. This paper investigates the causal relationship between trade openness and foreign direct investment (FDI) inflows in Romania during the period 1997–2019. Throughout this study, Trade Openness is the main independent variable, and Gross Domestic Product (GDP), Real Effective Exchange Rate (EXR), Inflation (INF), and Education (EDU) act as control variables for investigating the relationships between trade openness (TOP) and FDI inflow in Romania. The Auto Regressive Distributed Lag (ARDL) Bounds test procedure was adopted to achieve the above-mentioned objective. Trade openness has negative and statistically significant long-run and short-run relationships with FDI inflows in Romania throughout the period. Trade openness negatively affects the FDI inflow, which suggest that the higher the level of openness is, the less likely it is that FDI will be attracted in the long run. The result of the Granger causality test indicated that Romania has a unidirectional relationship between trade openness and FDI. It also showed that the direction of causality ran from FDI to trade openness.

Effects of Infrastructure Development on Foreign Direct Investment in Kenya

2016 ◽  
Vol 8 (2) ◽  
pp. 93-110 ◽  
Author(s):  
Carol Teresa Wekesa ◽  
Nelson H. Wawire ◽  
George Kosimbei
Keyword(s):  
Foreign Direct Investment ◽  
Direct Investment ◽  
Time Series Data ◽  
Trade Openness ◽  
Transport Infrastructure ◽  
Series Data ◽  
Infrastructure Development ◽  
Fdi Inflows ◽  
Year 2000 ◽  
Quality Infrastructure

Kenya’s foreign direct investment (FDI) inflows as a percentage of GDP have been increasing negligibly over the last 4 years, increasing from 0.4 per cent in 2010 to 0.9 per cent in 2013. And yet evidence shows that quality infrastructure lowers the cost of doing business and thus attracts FDI. Kenya has visible signs of infrastructure inadequacy and inefficiencies despite the fact that since the year 2000, there has been increased budgetary allocation to the infrastructure sector. This study, therefore, sought to determine the effects of transport, energy, communication and water and waste infrastructure development on FDI inflows in Kenya. The study used annual time series data sourced from Central Bank of Kenya, World Bank and the United Nations Conference on Trade and Development (UNCTAD). Using multiple regression analysis, it was established that improved transport infrastructure, communication infrastructure, water and waste infrastructure, exchange rate, economic growth and trade openness are important determinants of FDI inflows into Kenya. Hence, for Kenya to attract more FDI, continued infrastructural development is key since quality infrastructure affords investors a conducive investment climate in which to operate.

scholarly journals Determinant of FDI Inflows in OIC Countries

2021 ◽  
Vol 4 (1) ◽  
Author(s):  
Tania Megasari ◽  
Samsubar Saleh
Keyword(s):  
Economic Growth ◽  
Foreign Direct Investment ◽  
Exchange Rates ◽  
Direct Investment ◽  
Trade Openness ◽  
Political Stability ◽  
Fixed Effect Model ◽  
Fdi Inflows ◽  
Macroeconomic Variables ◽  
Effect Model

This study aims to analyze the determinants of foreign direct investment (FDI) in the Organization of Islamic Cooperation (OIC) country members for the period 2005 to 2018 The determinant variables of FDI are corruption, political stability and macroeconomic variables such as inflation, exchange rates, economic growth, and trade openness. Analysis used in the study  is the fixed effect model (FEM) of the OIC data panel.The results showed that economic growth and trade openness had a significant influence on foreign direct investment (FDI), while the effects of corruption, political stability, inflation and the exchange rate have no significant effect on foreign direct investment (FDI).

scholarly journals The Determinants of Foreign Direct Investment in China: A Spatial Panel Analysis

2016 ◽  
Author(s):  
Chen-Chen Yong ◽  
Siew-Yong Yew ◽  
Xin Huang ◽  
Mui-Yin Chin
Keyword(s):  
Foreign Direct Investment ◽  
Direct Investment ◽  
Eastern Region ◽  
Panel Analysis ◽  
Fdi Inflows ◽  
Spatial Panel ◽  
Panel Model ◽  
Spatial Panel Model ◽  
Investment In China ◽  
Determinants Of Fdi

China is currently the major foreign direct investment (FDI) destination arising from her open door policies since 1978. FDI has become a large impetus to China’s economic growth. However, the geographical distribution of FDI in China is severely biased with 83% concentrated in the eastern region. This is a result of not only differences in locational advantages but also the result of the initiating policies and temporal differences of FDI inflows among the regions. This study aims to examine the determinants of FDI and examine empirically the possible coherent policies for the three regions of China (Eastern, Central and Western) using the spatial panel analysis for the data within the period of 1994 to 2008. The empirical results show that the determinants of FDI vary among the three regions, depending on the motives of the investor and the results of policy bias. The entrepreneurial nature of competition of FDI among the provinces revealed by the spatial FDI factor is a conclusion that cannot be ignored. A more coherent policy on FDI inflows into China is an urgent necessity, though the policies for each region must be, of necessity, different for each of the three regions.   Keywords: Foreign Direct Investment, China, Spatial panel model, spatial variables JEL: F14, C33

Regional and Sectoral Disparities in Inflow of FDI in India

2012 ◽  
pp. 149-162 ◽  
Author(s):  
Behrooz Shahmoradi
Keyword(s):  
Developing Countries ◽  
Economic Development ◽  
Foreign Direct Investment ◽  
Developing Country ◽  
Direct Investment ◽  
Steady Increase ◽  
Policy Makers ◽  
Fdi Inflows ◽  
Reform Period ◽  
Micro Level

During the last two decades, Foreign Direct Investment (FDI) has become increasingly important in the developing world, with a growing number of developing countries seeking in attracting substantial and rising amounts of inward FDI. Furthermore, FDI has become the most important source of finance that can contribute to economic development. Recognizing this, all the governments want to attract it. India as a developing country is not an exception in this regard therefore study the different aspects of FDI can be helpful for policy makers in macro as well as micro level. Since 1990, FDI has been considered as the most powerful driver of economic development. While India has seen a steady increase in FDI inflows in the post-reform period, therefore, this study tries to analyze the regional and sectoral disparities in Inflow of FDI in India since 1990. The analysis showed that there is a disparity between states in India and it also indicates a shift from primary and secondary sectors to tertiary sectors and pervasive computing areas.

Regional and Sectoral Disparities in Inflow of FDI in India

2010 ◽  
pp. 234-246
Author(s):  
Behrooz Shahmoradi
Keyword(s):  
Developing Countries ◽  
Economic Development ◽  
Foreign Direct Investment ◽  
Developing Country ◽  
Direct Investment ◽  
Steady Increase ◽  
Policy Makers ◽  
Fdi Inflows ◽  
Reform Period ◽  
Micro Level

During the last two decades, Foreign Direct Investment (FDI) has become increasingly important in the developing world, with a growing number of developing countries seeking in attracting substantial and rising amounts of inward FDI. Furthermore, FDI has become the most important source of finance that can contribute to economic development. Recognizing this, all the governments want to attract it. India as a developing country is not an exception in this regard therefore study the different aspects of FDI can be helpful for policy makers in macro as well as micro level. Since 1990, FDI has been considered as the most powerful driver of economic development. While India has seen a steady increase in FDI inflows in the post-reform period, therefore, this study tries to analyze the regional and sectoral disparities in Inflow of FDI in India since 1990. The analysis showed that there is a disparity between states in India and it also indicates a shift from primary and secondary sectors to tertiary sectors and pervasive computing areas.

scholarly journals KAJIAN AKTIVITAS EKONOMI LUAR NEGERI INDONESIA TERHADAP PERTUMBUHAN EKONOMI INDONESIA PERIODE 1998-2014

2017 ◽  
Vol 9 (2) ◽  
pp. 119
Author(s):  
Ryan Hawari ◽  
Fitri Kartiasih
Keyword(s):  
Economic Growth ◽  
Foreign Direct Investment ◽  
Exchange Rate ◽  
Direct Investment ◽  
Forecast Error ◽  
Foreign Debt ◽  
Trade Openness ◽  
Impulse Response Function ◽  
Error Variance ◽  
Forecast Error Variance

Indonesia is a developing country which adopts an “open economic”. That caused Indonesia economic is strongly influenced by factors that come from outside of Indonesia. External factors in this research is referred to foreign debt, foreign direct investment, trade openness and exchange rate of rupiah with USD. The analytical method in this research used Vector Error Correction Model (VECM) which will focused on Impulse Response Function (IRF) and Forecast Error Variance Decomposition (FEVD). Based on result of IRF, exchange rate had a positive effect to economic growth, while foreign debt, foreign direct investment and trade openness had a negative effect to economic growth. Based on result of FEVD, shock on economic growth in Indonesia affected by economic growth itself (43.21%), followed by foreign debt (26.30%), trade openness (14.16%), foreign direct investment (8.29%) and exchange rate (8.04%) Keywords: economic growth, trade openness, VECM, IRF, FEVD

scholarly journals PRODUCTIVITY SHOCKS, FOREIGN DIRECT INVESTMENT, AND CAPITAL TAXES

Ekonomika ◽  
2015 ◽  
Vol 93 (4) ◽  
pp. 58-71
Author(s):  
Aras Zirgulis
Keyword(s):  
Foreign Direct Investment ◽  
Direct Investment ◽  
Foreign Competition ◽  
Productivity Shocks ◽  
Fdi Inflows ◽  
Tax Rate ◽  
Domestic Capital ◽  
Capital Tax ◽  
Model Evidence ◽  
Dynamic Spatial Model

The present study deals with the effect that productivity and capital taxes have on foreign direct investment through a panel consisting of 41 countries utilising the GMM system on a dynamic spatial model. Evidence reveals that an increase in the domestic capital tax rate leads to less FDI inflows, and higher levels of domestic productivity growth lead to less FDI inflows. Foreign competition did not have a significant effect on domestic FDI inflows.

scholarly journals Determinants of Foreign Direct Investment: New Granger Causality Evidence from Asian and African Economies

2016 ◽  
Vol 8 (1(J)) ◽  
pp. 104-119
Author(s):  
Olawumi D Awolusi ◽  
Theuns G Pelser ◽  
Adedeji Saidi Adelekan
Keyword(s):  
Foreign Direct Investment ◽  
Granger Causality ◽  
Monetary Union ◽  
Significant Relationship ◽  
Direct Investment ◽  
Trade Openness ◽  
Market Size ◽  
Fdi Inflows ◽  
Infrastructural Development ◽  
Macroeconomic Condition

Previous studies on the determinants of foreign direct investment (FDI) have predominantly focused on developed and emerging economies. However, there seem to be few studies concentrating on a comparative analysis of vast African and Asian countries. This paper analysed drivers of foreign direct investments (FDI) to Asian and African economies using a panel dataset from 1980 to 2013.This study used Granger causality test, under vector error correction modelling (VECM) to test for causality among the variables. While the drivers of FDI inflows were measured using five dimensions as proposed by Anyanwu; the dependent variable, FDI inflows, was proxied by the ratio of FDI flows to gross domestic product (GDP). Findings revealed that variables manifesting the determinants of FDI inflows positively affected FDI into these continents. Specifically, factors such as trade openness, macroeconomic condition, infrastructural development, and monetary union have positive and significant effect on FDI to Asian economies. No significant relationship was found between FDI inflows and market size to the Asian continent during the study period. On the other hand, trade openness, macroeconomic condition, market size and infrastructural development have positive and significant effects on FDI inflows to African economies although there was no significant relationship between FDI inflows and monetary union to the African continent during the study period. In fact, there were bi-directional relationships between FDI inflows and some of the determinants in both continents. Theoretically, this model provides predictive implications on improved FDI inflows, given the activities of critical variables manifesting as determinants of FDI inflows.

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