scholarly journals The effects of large-scale sport events on foreign direct investment inflows: the results of empirical estimation

2020 ◽  
Vol 12 (6) ◽  
pp. 167-187
Author(s):  
I. M. Drapkin ◽  
S. A. Lukyanov
Keyword(s):  
Economic Growth ◽  
Foreign Direct Investment ◽  
Direct Investment ◽  
Large Scale ◽  
Empirical Estimation ◽  
Fdi Inflows ◽  
Scientific Discussion ◽  
Winter Olympic Games ◽  
Sport Events ◽  
Foreign Direct Investment Inflows

The expediency of hosting large-scale sport events (LSE), such as the Summer and Winter Olympic Games, FIFA World Cup and EUFA European Championship, is a matter of public and scientific discussion. The main argument against hosting large-scale sport events is the substantial direct financial losses for an organizing country in most cases. Moreover, local residents often oppose hosting major sport events because of price increase and different inconveniences in their everyday life. At the same time the effects of hosting large-scale events have long-term nature and go beyond direct financial benefits. One of the difficulties in estimating the effects of LSE is that they are hard to measure.The literature review shows the deficit of research on how large-scale events influence the foreign direct investment inflows in the hosting country. In contrast to numerous papers on LSE influence on economic growth, foreign trade, international tourist flows, the authors found only one article devoted to LSE influence on FDI inflows. The present paper analyzes the influence of major sport events on foreign direct investment flows to the hosting country. The estimated database comprises data for 195 countries for the period of 1970–2018, 24 out of which hosted or will host 48 major sport events. The regression analysis indicates that LSE induce significant influence on foreign direct investment flows in the hosting economy. Comparing several models, we show that the most reliable is the model where hosting LSE positively influence on FDI inflows within the period starting 8 years before and ending 4 years after the event. We explain the result by the following. Firstly, fostering economic growth due to hosting LSE serves as a catalyst of foreign direct investment inflows. Secondly, LSE improves image of the hosting country abroad that positively affects the attractiveness of the country to foreign investors. Thirdly, the growing openness of the economy due to LSE (expressed for example in growth of international trade) positively affects the FDI inflows.The authors declare the absence of conflict of interests.

scholarly journals Is Russia successful in attracting foreign direct investment? Evidence based on gravity model estimation

2016 ◽  
Vol 16 (3) ◽  
pp. 245-267 ◽  
Author(s):  
Oleg Mariev ◽  
Igor Drapkin ◽  
Kristina Chukavina
Keyword(s):  
Foreign Direct Investment ◽  
Gravity Model ◽  
Host Country ◽  
Direct Investment ◽  
Recipient Country ◽  
Developed Countries ◽  
Likelihood Method ◽  
Empirical Estimation ◽  
Fdi Inflows ◽  
Russian Economy

Abstract The aim of this paper is twofold. First, it is to answer the question of whether Russia is successful in attracting foreign direct investment (FDI). Second, it is to identify partner countries that “overinvest” and “underinvest” in the Russian economy. We do this by calculating potential FDI inflows to Russia and comparing them with actual values. This research is associated with the empirical estimation of factors explaining FDI flows between countries. The methodological foundation used for the research is the gravity model of foreign direct investment. In discussing the pros and cons of different econometric methods of the estimation gravity equation, we conclude that the Poisson pseudo maximum likelihood method with instrumental variables (IV PPML) is one of the best options in our case. Using a database covering about 70% of FDI flows for the period of 2001-2011, we discover the following factors that explain the variance of bilateral FDI flows in the world economy: GDP value of investing country, GDP value of recipient country, distance between countries, remoteness of investor country, remoteness of recipient country, level of institutions development in host country, wage level in host country, membership of two countries in a regional economic union, common official language, common border and colonial relationships between countries in the past. The potential values of FDI inflows are calculated using coefficients of regressors from the econometric model. We discover that the Russian economy performs very well in attracting FDI: the actual FDI inflows exceed potential values by 1.72 times. Large developed countries (France, Germany, UK, Italy) overinvest in the Russian economy, while smaller and less developed countries (Czech Republic, Belarus, Denmark, Ukraine) underinvest in Russia. Countries of Southeast Asia (China, South Korea, Japan) also underinvest in the Russian economy.

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 Agricultural Sector FDI and Economic Growth in Saarc Countries

2019 ◽  
Vol 8 (2S10) ◽  
pp. 116-121
Keyword(s):  
Economic Growth ◽  
Foreign Direct Investment ◽  
Direct Investment ◽  
Agricultural Sector ◽  
South Asians ◽  
Secondary Data ◽  
Agricultural Products ◽  
Fdi Inflows ◽  
Important Relationship ◽  
The Relationship

The study seeks to establish the relationship between foreign direct investment to Saarc region agricultural sector and economic growth with secondary data. SAARC comprises 3% of the world's area, 21% of the world's population and 3.8% (US$2.9 trillion) making up a total of 3% of the world’s area. The country has second in all over the world in terms of agriculture position. The population obliquely all of the member states is over 1.7 billion, accounting for 21% of the world’s total population. In their 42% of the agricultural operation in SAARC nations and also 51% source of livelihood of the South Asians. The study has revealed that India alone accounts for 52 per cent of the agricultural products using the SAARC region peoples. For the present study, a total of 34 groups related to the agricultural products were selected out of the total groups. The techniques employed to analyze the data include descriptive statistic, correlation and linear forecast method. The study also revealed a positive and important relationship between economic growth and foreign direct investment flow to the agricultural sector. Thus, the study recommends that policy should focus on flexible trade policies to attract more foreign direct investment (FDI) inflows to SAARC nations. i.e. Afghanistan, Bangladesh, Bhutan, Maldives, Nepal, Pakistan, Sri Lanka including India

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 CONTRIBUTION OF FDI AND FINANCIAL DEVELOPMENT ON ECONOMIC GROWTH IN SRI LANKA

2021 ◽  
Vol 8 (1) ◽  
pp. 25-34
Author(s):  
Sarojini Maheswaranathan ◽  
K.M.N. Jeewanthi
Keyword(s):  
Economic Growth ◽  
Foreign Direct Investment ◽  
Sri Lanka ◽  
Private Sector ◽  
Financial Development ◽  
Direct Investment ◽  
Capital Investment ◽  
Bank Credit ◽  
Percent Increase ◽  
Foreign Direct Investment Inflows

The present study investigates the relationship between financial development, Foreign direct investment and economic growth in Sri Lanka for the period 1980 to 2019 by applying the Augmented Dickey-Fuller Unit root test along with the ARDL approach in process of achieving the desired objective. The outcome of this study shows that except GDP and FDI all other variables such as Capital investment as a percent of GDP (CI), Bank credit to the private sector as a percent of GDP (BCP), net foreign direct investment inflows in % of GDP (FDI) are stationary at first difference. The findings reveal that net foreign direct investment inflows are a positive relationship with economic growth in the long run. It means a one percent increase in net foreign direct investment inflows increases the GDP by   0.826439 percent. At the same time, a one percent increase in bank credit to the private sector decreases the GDP by 0.864320 percent. Moreover, in the short run FDI, CI and BCP have a positive and significant impact on GDP.  Diagnostic tests such as normality test, heteroskedasticity and serial autocorrelation are employed to validate parameter estimation outcomes. Further, the stability of the variables confirms by the CUSUM test.  The country should propose Strategies to boost the growth of efficient domestic financial institutions and encourage policy to attract greater FDI inflows that meet the needs of the knowledge-based economy.

scholarly journals Impact of Foreign Direct Investment Inflows on Economic Growth; the Case of the Republic of Seychelles

2019 ◽  
Author(s):  
Yusheng Kong ◽  
Sampson Agyapong Atuahene ◽  
Geoffrey Bentum-Mican ◽  
Abigail Konadu Aboagye
Keyword(s):  
Economic Growth ◽  
Foreign Direct Investment ◽  
Direct Investment ◽  
Least Square ◽  
Small Island ◽  
Host Countries ◽  
Fdi Inflows ◽  
Economic Trends ◽  
The Republic ◽  
The Impact

This paper aims to research whether there is link between FDI inflows and Economic growth in the Republic of Seychelles Island. The ordinary least square results obtained shows that in the impact of FDI inflows on economic growth is low. Small Island Developing States attracts less FDI inflow because they are limited to few resources that attracts overseas firms which results in retarded development. The research lighted that impact of foreign direct investment on host countries does not only depend on the quality and quantity of the FDI inflows but some other variables such as the internal policies and the management skills, market structures, economic trends among others.

Trade Liberalization, Foreign Direct Investment Inflows, Environmental Quality and Economic Growth Nexus: A Comparative Analysis of Pakistan and China

2019 ◽  
Vol 2 (1) ◽  
pp. 17-26
Author(s):  
Sumaira Alvi ◽  
Imran Sharif Chaudhry ◽  
Fatima Farooq ◽  
Noreen Safdar
Keyword(s):  
Economic Growth ◽  
Foreign Direct Investment ◽  
Trade Liberalization ◽  
Environmental Quality ◽  
Direct Investment ◽  
Negative Impact ◽  
Positive Impact ◽  
Secondary Data ◽  
Bounds Testing ◽  
Foreign Direct Investment Inflows

The present research endeavors to evaluate whether trade liberalization, foreign direct investment inflows and environmental quality affect the economic growth in Pakistan and China. These have crucial role in the economies and pragmatic for formulating economic growth policies. The secondary data is used for all the variables. The ARDL bounds testing approach to cointegration is applied to evaluate the determinants included in the model for both countries. The results of the research conclude that trade liberalization and foreign direct investment both have positive impact on economic growth while environmental pollution has negative impact on economic growth in long-run.

Do surges in foreign direct investment inflows lead to surges in economic growth? Evidence from developing countries

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Jagadish Prasad Sahu
Keyword(s):  
Economic Growth ◽  
Developing Countries ◽  
Foreign Direct Investment ◽  
Direct Investment ◽  
Domestic Investment ◽  
Fdi Inflows ◽  
Content Type ◽  
Regression Methods ◽  
Recursive Bivariate Probit ◽  
Rapid Economic Growth

Purpose The purpose of this paper is to examine whether surge in foreign direct investment (FDI) inflows leads to surge in economic growth in 52 developing countries for the period 1990-2014. Design/methodology/approach The author used a threshold approach to identify surge incidences in gross domestic product (GDP) per capita growth rates and FDI inflows (measured as percentage of GDP) for each country included in the sample. Three different criteria are used to identify surge instances. As a preliminary analysis the author used the probit and complementary log–log regression methods to estimate the likelihood of growth surge occurrence. To correct the potential endogeneity problem the author jointly estimated the growth surge and FDI surge equations using the recursive bivariate probit (RBP) regression. Findings The author found that East Asia and the Pacific region has highest rate of growth surge incidences followed by South Asia. The results suggest that surge in FDI inflows significantly increases the likelihood of growth surge. The finding is robust to alternative surge definitions and methods of estimation. Practical implications The analysis reveals that inbound FDI flow is a critical driver of economic growth in developing countries. Large FDI inflows matters for achieving rapid economic growth. Therefore developing countries should adopt favourable policies to attract more FDI. Policymakers should focus on improving the investment climate of the country to boost domestic investment and to attract larger amount of FDI into the economy. Originality/value To the best of the author’s knowledge this is the first study to examine whether surge in FDI inflows stimulates surge in economic growth in developing countries. The analysis reveals that FDI surge is a robust predictor of rapid economic growth in developing countries.

scholarly journals Foreign Direct Investment, Trade and Economic Growth: A New Paradigm of the BRICS

2015 ◽  
Vol 9 (12) ◽  
pp. 32 ◽  
Author(s):  
Akhilesh Chandra Prabhakar ◽  
Muhammad Azam ◽  
B. Bakhtyar ◽  
Yusnidah Ibrahim
Keyword(s):  
Economic Growth ◽  
Foreign Direct Investment ◽  
Regional Integration ◽  
Direct Investment ◽  
New Paradigm ◽  
Fdi Inflows ◽  
Long Run ◽  
Equilibrium Relationship ◽  
Development Context ◽  
Sustainable Equilibrium

<p class="zhengwen"><span lang="EN-GB">The present study begins by surveying broadly supports the assertion that regional integration in the case of the BRICS is not adequately paid attention except with very few original or significant contributions. This research examines the existing pattern in the areas of trade and investment with a view to locate in the development context. It was also essential to make a theoretical investigation on literature of trade along with the empirical one. The survey broadly supports the frequent, through usually undocumented, assertion that BRICS was an area had tended to neglect and to which they had made few if any original or significant contributions. Alongside, this study panel data on BRICSs, where the results confirm that foreign direct investment (FDI), trade and economic growth indicate the presence of long-run sustainable equilibrium relationship between them. It is thus important that policymakers to remove obstacles to FDI inflows and improve the respective absorptive capacity in order to reap maximize positive growth effects. This study also discussed that how China performed well through attracting FDI inflows and maintained trade balance. </span></p>

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