scholarly journals Examining the Equilibrium Relationships between Foreign Direct Investment Inflows and Employment in Manufacturing and Services Sectors: Evidence from Malaysia

2013 ◽  
Vol 4 (1) ◽  
pp. 32-38
Author(s):  
Hussain Ali Bekhet
Keyword(s):  
Foreign Direct Investment ◽  
Direct Investment ◽  
Current Paper ◽  
Policy Makers ◽  
Fdi Inflows ◽  
Long Run ◽  
Ardl Approach ◽  
Short Run ◽  
Equilibrium Relationships ◽  
F Statistics

The current paper examines the long-run and short-run equilibrium relationships between FDI inflows and employment in Malaysian manufacturing and services sectors using ARDL approach for the 19722011 period. It employs ADF and PP tests to detect the stationary levels of above variables. Also, it utilizes the bounds F-statistics test to identify the co-integration among variables. Results of ARDL approach indicate the presence of significant long-run and short-run equilibrium relationships between FDI inflows and employment in manufacturing and services sectors. The paper’s findings are of particular interest and importance to Malaysian policy makers towards increasing FDI inflows and employment in manufacturing and services sectors.

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.

scholarly journals Dynamic Causal Relationships among GDP, Exports, and Foreign Direct Investment (FDI) in the Developing Countries

2013 ◽  
Vol 14 ◽  
pp. 1-19 ◽  
Author(s):  
Mohsen Mehrara ◽  
Amin Haghnejad ◽  
Jalal Dehnavi ◽  
Fereshteh Jandaghi Meybodi
Keyword(s):  
Economic Growth ◽  
Developing Countries ◽  
Foreign Direct Investment ◽  
Strong Evidence ◽  
Direct Investment ◽  
The Other ◽  
Fdi Inflows ◽  
Long Run ◽  
Short Run ◽  
Growth Hypothesis

Using panel techniques, this paper estimates the causality among economic growth, exports, and Foreign Direct Investment (FDI) inflows for developing countries over the period of 1980 to 2008. The study indicates that; firstly, there is strong evidence of bidirectional causality between economic growth and FDI inflows. Secondly, the exports-led growth hypothesis is supported by the finding of unidirectional causality running from exports to economic growth in both the short-run and the long-run. Thirdly, export is not Granger caused by economic growth and FDI inflow in either the short run or the long run. On the basis of the obtained results, it is recommended that outward-oriented strategies and policies of attracting FDI be pursued by developing countries to achieve higher rates of economic growth. On the other hand, the countries can increase FDI inflows by stimulating their economic growth.

scholarly journals Role of Education and Financial Market Development in Attracting Foreign Direct Investment Inflows in Pakistan

TEM Journal ◽  
2021 ◽  
pp. 1184-1189
Author(s):  
Haider Mahmood ◽  
Muhammad Tanveer
Keyword(s):  
Foreign Direct Investment ◽  
Financial Market ◽  
Direct Investment ◽  
Market Development ◽  
Fdi Inflows ◽  
Long Run ◽  
Short Run ◽  
Financial Market Development ◽  
Positive Effect

This paper has investigated the role of education and Financial Market Development (FMD) on the Foreign Direct Investment (FDI) inflows in Pakistan from 1970-2019. In the short run, education has a positive effect on FDI inflows. 1% increasing of government's spending on education would increase 0.361% of FDI inflows in Pakistan. Moreover, the FMD has a positive effect on FDI inflows in the short run. 1% increasing FMD may increase 0.0496% of FDI in the short run. Both education and FMD are supporting the FDI inflows in the short run. Comparatively, education shows a larger effect on FDI than that of FMD in the short run. However, FMD and government spending on education could not affect the FDI inflows in the long run. This paper recommends supporting education and financial markets to attract FDI inflows in Pakistan.

scholarly journals Foreign Direct Investment, Export Performance and Sustainable Development in Nigeria

2019 ◽  
Vol 12 (2) ◽  
pp. 110
Author(s):  
Akintoye Victor Adejumo
Keyword(s):  
Sustainable Development ◽  
Foreign Direct Investment ◽  
Direct Investment ◽  
Manufacturing Sector ◽  
Export Performance ◽  
Fdi Inflows ◽  
Export Sector ◽  
Long Run ◽  
Short Run ◽  
Manufactured Exports

This study sets out to examine the role of manufacturing sector Foreign Direct Investment (FDI) in the quest for export sector diversification in Nigeria for sustainable development. This objective was achieved by estimating the effects of manufacturing sector FDI on manufactured goods export from Nigeria using the Autoregressive Distributed Lag estimating technique. The study discovered that FDI inflows into the country’s manufacturing sector impacted negatively on manufactured exports in the short run. The short run result nevertheless gave way to a positive and significant influence of FDI on manufactured exports in the long run, indicating that this form of foreign capital is important for manufactured export promotion in Nigeria. The resulting long run positive FDI- spillovers on export performance in Nigeria is in tandem with the neoliberal theoretical viewpoint that developing countries can rely on FDI as ladder to sustainable development. The findings suggest that sustainable development can be enhanced in Nigeria by exploiting the channel of positive spillovers from sector specific FDI inflows. The study concludes that with appropriate policy stance, one important way of pursuing the long run goal of sustainable development is to route FDI inflows in the direction of the country’s manufacturing sector.

scholarly journals Impact of Foreign Direct Investment on Trade Balance: Evidence from Cote d’Ivoire

2020 ◽  
Vol 12 (7) ◽  
pp. 113
Author(s):  
Yaya Keho
Keyword(s):  
Foreign Direct Investment ◽  
Trade Balance ◽  
Direct Investment ◽  
Real Effective Exchange Rate ◽  
Estimation Methods ◽  
Fdi Inflows ◽  
Long Run ◽  
Effective Exchange ◽  
Short Run ◽  
Effective Exchange Rate

Foreign direct investment (FDI) inflows have been increasing in developing countries over the past decades. However, there is only a few evidence about their impact on the trade balance on the recipient countries. This study empirically examines the issue for Cote d’Ivoire from 1980 to 2017. To that end, we extend the traditional trade balance function to include FDI and employ alternative cointegration testing and estimation methods. The results show that domestic income, real effective exchange rate and foreign direct investment are important drivers of trade balance. A real depreciation of domestic currency improves the trade balance both in the long and short run, thus consistent with Marshall-Lerner condition. Furthermore, FDI adversely affects trade balance in the long run.

scholarly journals Foreign Direct Investment and Tourism Development in Africa

2020 ◽  
Vol 25 (4) ◽  
pp. 395-408
Author(s):  
Ogechi Adeola ◽  
Nathaniel Boso ◽  
Ellis L. C. Osabutey ◽  
Olaniyi Evans
Keyword(s):  
Foreign Direct Investment ◽  
Direct Investment ◽  
Tourism Development ◽  
Political Stability ◽  
Annual Data ◽  
African Countries ◽  
Fdi Inflows ◽  
Distributed Lag ◽  
Long Run ◽  
Short Run

This study examines the nexus between foreign direct investment (FDI) inflow and tourism development. Using annual data for 44 countries in Africa from 1995 to 2014, and three different specifications of panel autoregressive distributed lag model, the study investigates short-run and long-run dynamics between FDI and tourism development. The study finds a significant positive relationship and a bidirectional long-run causality between FDI inflows and tourism development. In addition, the results show a negative short-run relationship between exchange rate and tourism development. Furthermore, there is evidence that economic growth and political stability are important determinants of tourism development. A major policy implication for African countries is that creating a politically stable environment and sustaining a growing economy help attract FDI inflows to boost tourism development.

scholarly journals The Dynamic Link Between Financial Development, Trade Openness and Foreign Direct Investment: Empirical Evidence from Ethiopia

2021 ◽  
Vol 16 (2) ◽  
pp. 179-206
Author(s):  
Mekuanent Tesega ◽  
Keyword(s):  
Foreign Direct Investment ◽  
Private Sector ◽  
Financial Development ◽  
Significant Influence ◽  
Direct Investment ◽  
Trade Openness ◽  
Causality Test ◽  
Fdi Inflows ◽  
Long Run ◽  
Short Run

Foreign direct investment (FDI) is an important source of external financing and an important factor for the economic development of a country. FDI is highly important especially for developing countries as it brings modern technologies and management skills in addition to narrowing the financial gaps. In this sense the knowledge of what determines FDI will have a tremendous significance. With the objective of empirically determining the long-run and short-run relationships between financial development, trade openness and FDI inflows in Ethiopia this study employed the ARDL model. The findings indicated that private sector credit, M2 and trade openness have a positive and significant influence on FDI inflows in the long-run while M2, and trade openness has a positive and significant influence on FDI in the short-run too. Current period private sector credit had no impact on FDI while the one period lag of it has a positive significant effect on FDI. Likewise, the causality test results disclose the presence of bi-directional causal relationships between private sector credit and FDI, and between M2 and trade openness. Furthermore, the findings indicate a one direction Granger cause from M2 to FDI. Policy makers are advised to consider trade openness and financial development measures in their quest for more FDI inflow. Keywords: FDI, trade openness, financial development, ARDL, Ethiopia

scholarly journals Trade Liberalization and Foreign Direct Investment in Malaysia

2015 ◽  
Vol 7 (6) ◽  
pp. 11-23
Author(s):  
Sabariah Nordin ◽  
Gairuzazmi B. Mat Ghani .
Keyword(s):  
Foreign Direct Investment ◽  
Direct Investment ◽  
Time Series Data ◽  
Trade Openness ◽  
Series Data ◽  
Bounds Testing ◽  
Long Run ◽  
Ardl Approach ◽  
Short Run ◽  
Influential Variable

A decision to establish foreign direct investment (FDI) involves a lot of critical thinking, especially in deciding a place to locate the investment. Evaluation and consideration comprise of costs and benefits of launching the FDI. This study focuses on time series data for the sample period of 1970 to 2009. The main objective of this study is to identify the major determinant of the inward flows of FDI for Malaysia by employing the bounds testing (ARDL) approach to cointegration. Of all the variables being tested, trade openness is found to be the most influential variable in attracting the inflows of FDI as it shows consistent results in the short run as well as in the long run in all models being tested. Since the trade openness which represents the liberalization of the Malaysian economy could induce the inflows of FDI, some policy actions can be taken up to enhance the trade openness.

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.

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