The Commitment of Foreign Direct Investment and Foreign Portfolio Investment on the Monetary Development of Pakistan

Foreign direct investment has played an essential role in the economic growth of developing countries. The flow of foreign capital in the capital takes place mostly in the form of loans, foreign direct investment (FDI) and foreign portfolio investment (FPI). The FDI could influence higher consumption and Investment in short-term and reflect destructively on long-term growth. However, an increase in FDI may decrease FPI volatility because it enhances the confidence of foreign investors and brings more investment in the home country. The Pakistan growth rate was witnessed from 2001-2016, which was descending due to various macroeconomic variables which influence the foreign direct investment of Pakistan. The FDI affects positively in the development process and economic progress as it supplies capital for developing nations for investment purpose. A few investigations have been directed on contact between FDI, FPI and large-scale manufacturing. Because of this plausibility, FDI impacts monetary extension, and thus, financial solidness impact FDI inflow, the connection among FDI and the development of the economy are likely unique. Also, the remote venture may impact monetary progression legitimately and in a roundabout way. In this manner, it is recommended in reliance hypothesis that FDI stream would not impact long haul practical limit in creating economies. Henceforth the progression of remote capital in a nation happens for the most part as credits, FDI and FPI. Likewise, the determinants of FPI incorporates factors which increment interest for outside trade and urges remote speculators to contribute their capital over the creating scene. Hence, therefore, this paper highlights the importance of FDI and FPI on the growth of developing countries.

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Impact of Foreign Direct Investment on Domestic Investment in Developing Countries

Bulletin of Science and Practice ◽

10.33619/2414-2948/58/27 ◽

2020 ◽

Vol 6 (9) ◽

pp. 256-266

Author(s):

A. Mamatkulov

Keyword(s):

Developing Countries ◽

Foreign Direct Investment ◽

Direct Investment ◽

Developing Economies ◽

Negative Impact ◽

Domestic Investment ◽

Short Term ◽

Total Investment ◽

The Impact

Author analyzes the impact of foreign direct investment on domestic investment in host developing countries and checks whether a foreign direct investment has a “positive” or “negative” impact on domestic investment, as well as evaluating the impact of selected variables on this relationship. Using a full sample, the main conclusion of this study is that FDI does have a positive (crowding out) effect on domestic investment in this sample of developing economies. In the short term, an increase in FDI by one percentage point as a percentage of GDP leads to an increase in total investment as a percentage of the host country’s GDP of about 10.7%, while in the long term this effect is about 31% dollar terms, one US dollar represents us 1.7$ of total investment in the short term and us 3.1$ in the long term. Based on the results of this study, it was once again proved that inflation hinders domestic investment in host countries by 0.04% and 0.12% in the short and long term, respectively.

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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.

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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.

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An Empirical Investigation on Foreign Capital Inflows and Economic Development in Nigeria

Asian Journal of Economics Business and Accounting ◽

10.9734/ajeba/2020/v14i230192 ◽

2020 ◽

pp. 63-76

Author(s):

G. Tunde, Monogbe ◽

J. Emeka, Okereke ◽

P. Ebele, Ifionu

Keyword(s):

Economic Development ◽

Foreign Direct Investment ◽

Capital Flows ◽

Direct Investment ◽

Foreign Capital ◽

Capital Inflows ◽

Portfolio Investment ◽

Foreign Portfolio Investment ◽

Foreign Capital Flows ◽

Foreign Capital Inflows

In an attempt to attained sustainable level of economic development in a nation, empirical studies as well as financial theories posit that foreign capital inflows play a lead role. As such, this study set out to empirically investigate the extent to which foreign capital flows promotes economic development in Nigeria. Time series data between the periods 1986 to 2018 were sourced from the central bank of Nigeria statistical bulletin and world bank data based. The study proxied foreign capital flows using foreign direct investment, foreign portfolio investment, foreign aids and external borrowings which is decomposed into multilateral and bilateral loans while Human development index is used as proxy for economic development. The study further employed unit root test, co-integration test, error correction model and granger causality test to ascertain the direction of relationship. Findings reveal that of the five indices of foreign capital inflows, three (foreign portfolio investment, foreign aids and bilateral loan) prove to be significant in promoting economic development in Nigeria, while foreign direct investment and multilateral loan are negatively related to economic development in Nigeria. As such, the study conclude that foreign capital inflows in the form of foreign portfolio investment, foreign aids and bilateral loans are significant in boosting economic development in Nigeria. Therefore, we recommend that managers of the Nigerian economic should create an enabling financial environment as this will help in accelerating further inflows of portfolio investment and thus boost economic development in Nigeria.

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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.

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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.

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2. Foreign Direct Investment and Foreign Portfolio Investment: Theory

Foreign Direct Investment ◽

10.1515/9781400829248-005 ◽

2008 ◽

Cited By ~ 1

Keyword(s):

Foreign Direct Investment ◽

Direct Investment ◽

Portfolio Investment ◽

Foreign Portfolio Investment ◽

Investment Theory

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Investigation of the Foreign Direct Investment and Environmental Pollution Nexus for Developing Countries

Advances in Environmental Engineering and Green Technologies - Handbook of Research on Strategic Management for Current Energy Investments ◽

10.4018/978-1-7998-8335-7.ch019 ◽

2021 ◽

pp. 320-338

Author(s):

Orkun Çelik ◽

Özge Korkmaz ◽

Zafer Adalı

Keyword(s):

Developing Countries ◽

Foreign Direct Investment ◽

Environmental Pollution ◽

Direct Investment ◽

Panel Cointegration ◽

Cointegration Test ◽

Annual Data ◽

Pollution Haven ◽

Panel Cointegration Test

In theory, the foreign direct investment and environmental pollution nexus is explained by three hypotheses. Firstly, pollution haven hypothesis assumes that there is a positive nexus between these variables. Secondly, pollution halo hypothesis supposes that there is negative connection between these variables. Lastly, neutrality hypothesis asserts the non-existence of the connection between these variables. In recent years, many researchers have frequently tested whether these hypotheses are valid for different countries. In this study, applying Westerlund panel cointegration test, the authors aim to explore the nexus between foreign direct investment and environmental pollution for 23 developing countries after global crisis. For this aim, they use annual data covering the period 2009-2019. According to the obtained empirical findings, the presence of the long-term nexus between foreign direct investment and environmental pollution is not detected for 23 developing countries. Accordingly, the authors can say that there is neutrality hypothesis.

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Causal Relationship Between FDI Flow and Technological Innovation in China and Japan

Journal of Advanced Computational Intelligence and Intelligent Informatics ◽

10.20965/jaciii.2019.p0536 ◽

2019 ◽

Vol 23 (3) ◽

pp. 536-545

Author(s):

Chengkun Liu ◽

Xiuwu Zhang ◽

Takashi Tamamine ◽

◽

...

Keyword(s):

Foreign Direct Investment ◽

Technological Innovation ◽

Direct Investment ◽

International Capital ◽

Short Term ◽

International Capital Flow ◽

Measure Model ◽

China And Japan ◽

The One

The improvement of a country’s technological innovation level is influenced by the technology spillover of inward foreign direct investment (IFDI) and outward foreign direct investment (OFDI). Based on the Coe and Helpmen’s theory of international capital flow model and one-way causality measure model, this study examines the similarities and dissimilarities between the dynamic effects of IDFI and OFDI on technological innovation in China and Japan to enumerate the differences in the utilization effect of FDI between developed and developing countries. The empirical results show that the one-way causality intensity of IFDI to technological innovation in China is weaker than that in Japan, but the FDI volatility in China is stronger than that in Japan. The one-way causality intensity of OFDI to technological innovation are low both in China and Japan, and the patterns of long-term and short-term effects are not identical. According to the results of our empirical research, we draw the conclusions and proposed suggestions for using IFDI and OFDI in China and Japan.

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PENGARUH PENANAMAN MODAL ASING TERHADAP PERTUMBUHAN EKONOMI DI INDONESIA

Media Ekonomi ◽

10.25105/me.v24i1.3789 ◽

2016 ◽

Vol 24 (1) ◽

pp. 63

Author(s):

Fajar Bimantoro ◽

Mona Adriana S

Keyword(s):

Economic Growth ◽

Foreign Direct Investment ◽

Financial Crisis ◽

Direct Investment ◽

Global Financial Crisis ◽

Consumer Price Index ◽

Impulse Response Function ◽

Short Term ◽

The Impact

The present study aimed to analyze the relationship between the level of foreign direct investment to Indonesia's economic growth in the period 1991-2014.Fokus of the present study was to analyze the short-term relationship between foreign direct investment and economic growth Indonesia. In addition, along with the financial crisis 2008 global bit much negative of Indonesia affected by the global economic slowdown due to the crisis. This prompted the present study was to also perform forecasting of the impact of global financial crisis on foreign direct investment and relation to economic growth. To answer these questions, this research chose VAR Vector Auto Regression or as a method to answer the research questions. Gross Domestic Product (GDP), Consumer Price Index, BI rate, and the Exchange Rate, the variables used in this research. The estimation results of the VAR indicate that direct investment from abroad did not have an impact on economic growth in the long term but has a strong bond in the short term against the growth of economics. This indicates that foreign investment into Indonesia increasingly quality in promoting economic growth. In addition, the results of forecasting using impulse response function indicates there will be the tendency of a decrease in the level of foreign direct investment and economic growth in Indonesia.

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