scholarly journals FDI Performance and Policy of India and China: A Comparative Analysis

2018 ◽  
Vol 4 (02) ◽  
Author(s):  
Rahul Bhasin ◽  
K V Bhanu Murthy
Keyword(s):  
Foreign Direct Investment ◽  
Comparative Analysis ◽  
Direct Investment ◽  
Market Size ◽  
Macroeconomic Factors ◽  
Fdi Inflows ◽  
Area Of Interest ◽  
Significant Area ◽  
Fdi Policies ◽  
India And China

The competition among countries to attract foreign direct investment (FDI) has increased significantly in the last two decades. While comparing FDI flows across countries, the comparison between India and China is a significant area of interest as these two countries enjoy strong similarities with each other in terms of population and market size and are also among the top prospective host economies for FDI inflows. However, they differ significantly in terms of their FDI performance. While China remains the largest host country in the developing world in terms of FDI inflows, India has been unable to attract comparable FDI inflows despite having a huge market. This paper analyses the aggregated as well as segregated trends in FDI inflows of both the countries and also presents a comparative analysis of the two countries in terms of their FDI policies and other macroeconomic factors. The analysis reveals that India needs further liberalization of its FDI policy and norms

scholarly journals DETERMINANTS OF FOREIGN DIRECT INVESTMENT IN THE VISEGRAD GROUP COUNTRIES AFTER THE EU ENLARGEMENT

2018 ◽  
Vol 24 (5) ◽  
pp. 1955-1978 ◽  
Author(s):  
Weihua Su ◽  
Dongcai Zhang ◽  
Chonghui Zhang ◽  
Josef Abrhám ◽  
Mihaela Simionescu ◽  
...  
Keyword(s):  
Foreign Direct Investment ◽  
Czech Republic ◽  
Direct Investment ◽  
Labour Force ◽  
Eu Enlargement ◽  
The European Union ◽  
Macroeconomic Factors ◽  
Foreign Investors ◽  
Fdi Inflows ◽  
Visegrad Group

Considering the role of foreign direct investment (FDI) inflows in the sustainable development of a country, the main aim of this paper is to identify some macroeconomic factors that positively or negatively influence FDI in Visegrad group countries after the European Union (EU) enlargement in 2004. We employed two types of approaches in our analysis: i) time series and ii) panel data approach. According to the generalized ridge regressions estimated in Bayesian framework, the perceived corruption was a factor that influenced FDI in all the countries. In Poland, Czech Republic and Slovakia corruption came through as a serious obstacle for FDIs since 2005, but this was not the case for Hungary. Even if Hungary is perceived as a country with high influence, foreign investors seem no to care about this fact and are more interested in the quality of human resources and the possibility to increase exports. Our panel approach based on a panel ARDL model identified a significant relationship between FDI, corruption index and labour force with advanced education however this causality was only detected in the long run. According to the Granger causality in panel, the attraction of FDI inflows succeeded in generating changes in total tax rate, but the issues related to corruption were not reduced at an acceptable level for foreign investors in Poland, Slovakia, and the Czech Republic.

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.

The Role of Foreign Direct Investment in Less-Developed Countries

2018 ◽  
pp. 46-65
Author(s):  
Chengchun Li ◽  
Sailesh K. Tanna
Keyword(s):  
Foreign Direct Investment ◽  
Direct Investment ◽  
Institutional Development ◽  
Civil Conflict ◽  
Developed Countries ◽  
Less Developed Countries ◽  
Macroeconomic Factors ◽  
Developmental Issues ◽  
Recent Trends ◽  
Fdi Policies

This chapter analyses a number of economic and developmental issues in less-developed countries (LDCs), reviewing the related literature and outlining the challenges ahead for LDCs. The issues considered include foreign direct investment (FDI) policies, recent trends on growth, civil conflict, institutional development, financial sector development, external debt, and other macroeconomic factors. These are identified as pertinent areas where LDCs have faced major challenges in their endeavours to improve economic welfare since they are related to the absorptive capacities, which are important for accruing growth benefits from inward FDI in LDCs. It is anticipated that coverage of these issues will enlighten the issues that these countries face in order to attract and utilise inward FDI. Additionally, it is argued that LDCs can avoid the risk of civil conflict by adopting proactive policies to attract FDI.

Determinants of Foreign Direct Investment in Australia

2013 ◽  
Vol 03 (08) ◽  
pp. 20-30
Author(s):  
Sauwaluck Koojaroenprasit
Keyword(s):  
Foreign Direct Investment ◽  
Research And Development ◽  
Exchange Rates ◽  
Significant Relationship ◽  
Direct Investment ◽  
Market Size ◽  
Corporate Tax ◽  
Fdi Inflows ◽  
Tax Rate ◽  
Significant Relationships

Determinants of Foreign Direct Investment (FDI) in Australia were analyzed from 1986 to 2011, based on data availability. The determinants considered FDI inflows according to aggregate FDI inflows and FDI inflows by the top three source countries (USA, UK and Japan). Empirical studies identified four results. (1) For the determinants of FDI in Australia, a larger market size will attract more FDI, whereas more openness and a higher corporate tax rate will discourage FDI inflows into Australia. Lower customs duty and lower interest and depreciation of exchange rates will attract more FDI. The relationship between FDI inflows into Australia and wages was not significant. (2) For the determinants of US inward FDI in Australia, a larger market size will attract more US inward FDI in Australia, whereas more openness and an appreciation of the exchange rate will discourage US inward FDI in Australia. A negative and significant relationship was obtained between customs duty and US inward FDI in Australia. There were positive and significant relationships between US inward FDI in Australia and both the interest and corporate tax rates. (3) For the determinants of UK inward FDI in Australia, greater research and development in Australia will attract more UK inward FDI in Australia, whereas a higher corporate tax rate will discourage UK inward FDI in Australia. The positive relationship between market size and UK inward FDI in Australia was not significant. Openness, customs duty and inflation did not have significant relationships with UK inward FDI in Australia. (4) For the determinants of Japanese inward FDI in Australia, higher wages and greater research and development will attract more Japanese inward FDI in Australia, whereas higher customs duty and a higher corporate tax rate will discourage Japanese inward FDI in Australia. There was no significant relationship between Japanese inward FDI in Australia and either the interest or exchange rates.

scholarly journals Corruption and FDI Inflows: Evidence from India and China

2017 ◽  
Vol 8 (4-1) ◽  
pp. 173-182
Author(s):  
Munir Hasan ◽  
Mohd Nayyer Rahman ◽  
Badar Alam Iqbal
Keyword(s):  
Foreign Direct Investment ◽  
Human Development ◽  
Human Development Index ◽  
Direct Investment ◽  
Sample Period ◽  
Fdi Inflows ◽  
Corruption Perception Index ◽  
Corruption Perception ◽  
Qualitative Factors ◽  
India And China

Abstract Foreign Direct Investment (FDI) is considered to be influenced not only by quantitative factors but also by qualitative factors. However, the present literature related to FDI focus more on quantitative factors rather than qualitative factors. One reason is that FDI is itself based on a quantitative benchmark (10% or more investment in equity). The qualitative factors that are related to FDI are governance, democracy, human development index etc. In the present study an endeavor is made to understand that how corruption influence FDI decision. FDI is taken in terms of percentage of GDP and Corruption is represented by Corruption Perception Index. The sample period of the study is from 1995 to 2014.

scholarly journals The Macroeconomic Determinants and the Impact of Sanctions on FDI in Iran: A Case Study

2019 ◽  
Author(s):  
Mehdi Rasouli Ghahroudi ◽  
Li chy Chong
Keyword(s):  
Foreign Direct Investment ◽  
Exchange Rate ◽  
Direct Investment ◽  
Inflation Rate ◽  
Positive Impact ◽  
Macroeconomic Factors ◽  
Fdi Inflows ◽  
Macroeconomic Determinants ◽  
The Impact ◽  
Moderating Role

In this paper, we examine the impact of the macroeconomic determinants of foreign direct investment inflows. We also investigate the moderating role of sanctions in FDI inflows into Iran. The empirical results reveal that macro determinants such as infrastructure, exchange rate, inflation rate, investment return, and governance have a long-run impact on FDI inflows in Iran. Our findings also show that GDP growth rate and trade openness have no significant effect on FDI. Our results indicate that sanctions do not have a significant moderating role in the relationship between macroeconomic factors and foreign direct investment. Surprisingly, international sanctions have a positive relationship with FDI inflows in Iran. Furthermore, sanction has a positive impact on inflation rate and exchange rate in Iran. Finally, our findings show that sanctions have had a significant impact on Iran's economic growth in recent years due to increasing the severity level of sanctions.

scholarly journals IMPACT OF MACROECONOMIC FACTORS ON FOREIGN DIRECT INVESTMENT IN SELECTED SOUTHEASTERN EUROPEAN COUNTRIES

TEME ◽  
2019 ◽  
pp. 1237 ◽  
Author(s):  
Jelena Andrašić ◽  
Vera Mirović ◽  
Branimir Kalaš
Keyword(s):  
Foreign Direct Investment ◽  
Direct Investment ◽  
Negative Impact ◽  
Positive Impact ◽  
Fixed Effect Model ◽  
European Countries ◽  
Market Size ◽  
Macroeconomic Factors ◽  
Effect Model ◽  
The Impact

Foreign direct investment has a significant role in Southeastern European countries. The aim of the paper is reflected in assessing the character and nature of the relationship between macroeconomic factors and foreign direct investment in Southeastern European countries. Further, the subject of paper includes the examination of the impact of selected macroeconomic variables on foreign direct investment in six countries for the period from 2000 to 2012. The selected countries are Albania, Bosnia and Herzegovina, Bulgaria, Macedonia, Romania and Serbia. The research includes an examination impact of market size, national competitiveness and employment on foreign direct investment. By using the Hausman test, it was confirmed that the fixed effect model is an appropriate model in panel analysis. Based on the result, it determined the positive impact of market size, while the industry's share of GDP and employment have a negative impact on this variable. Also, the results confirmed that only the market size of the countries significantly affected on the flow of foreign direct investment in Southeastern European countries.

Energy access and foreign direct investment in an emerging market: the Ghanaian perspective

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Ebenezer Bugri Anarfo ◽  
Abel Mawuko Agoba ◽  
Yakubu Awudu Sare ◽  
Daniel Komla Gameti
Keyword(s):  
Foreign Direct Investment ◽  
Direct Investment ◽  
Practical Implication ◽  
Emerging Market ◽  
Least Square ◽  
Energy Access ◽  
Macroeconomic Factors ◽  
Fdi Inflows ◽  
Content Type ◽  
The Impact

Purpose This study aims to investigate the impact of energy access on foreign direct investment (FDI) in an emerging market. Design/methodology/approach The study uses the two-stage least square instrumental variables estimation approach to compute the parameters of the model to account for any potential endogeneity and time persistence in energy access. Findings The results show that energy access significantly influences FDI inflows in Ghana. The results of the study also revealed that natural resources and macroeconomic variables such as real interest rate, gross domestic product growth rate are significant determinants of FDI inflows in Ghana. Practical implications The practical implication of this study is that there is a need for energy sector policy reforms in Ghana that would guarantee a secured and continued supply of energy to enhance energy access to boost FDI. Ghana should aim for a cost-effective, stable and environmentally friendly source of energy as an alternative to hydro energy as the main source of its power generation to promote FDI. Also, Ghana should initiate and implement policies aimed at creating an enabling and stable macroeconomic environment, as macroeconomic factors in this study are found to be drivers of FDI. Originality/value This study provides firsthand information on energy access and FDI from the Ghanaian perspective.

Brazil, BITs and FDI: A Synthetic Control Approach

2019 ◽  
Vol 20 (1) ◽  
pp. 68-97
Author(s):  
Paulo Cavallo
Keyword(s):  
Foreign Direct Investment ◽  
Comparative Analysis ◽  
Direct Investment ◽  
Control Method ◽  
Synthetic Control ◽  
Synthetic Control Method ◽  
Foreign Investors ◽  
Fdi Inflows ◽  
Control Approach ◽  
Peculiar Case

Abstract The explosion in bilateral investment treaties (BITs) signed between countries in the 1990s and the concurrent surge in foreign direct investment (FDI) flows draw substantial attention in the literature. This article tackles the controversial relationship between BITs and FDI inflows using an innovative technique: the synthetic control method. Brazil is a peculiar case because it is one of the few cases where FDI inflows had a significant surge even in the complete absence of BITs. Did foreign investors really not need BITs in order to invest in Brazil? I find evidence that, although Brazil received substantial amounts of FDI even in the absence of BITs, had they enacted any BIT, the inflow in the period would have been greater. The method builds a synthetic Brazil from a pool of other countries providing this way a better comparative analysis. The findings are robust to both in-space and in-time placebo experiments.

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