The Comparation of Foreign Financial Investment and Human Investment Effect on Economic in Indonesia Base on Macro Economic Point of View

The purpose of this study is to compare the impact of the direction of the relationship between education and health investment with economic growth in Indonesia, with the impact and direction of the relationship of foreign direct investment and portfolio investment with economic growth in Indonesia. This study uses a quantitative method using the Threshold Autoregressive model. This study uses secondary data from the world bank in the annual time period from 2000 to 2019. We found that Investment in education and health has an impact on increasing productivity which drives economic growth because labor productivity directly drives the real sector. However, FDI and FPI changed the financial position in terms of capital. Direct investment increases real capital which has an impact on the creation of new sources of economic production but has consequences in the form of income transfers abroad, resulting in cash outflows. The existence of these foreign transfers continuously when economic conditions are stable and the real sector grows and generates profits that can be greater than the cash inflows obtained when foreign direct investments are made.

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Reducing the Risks of the Financial Sector to Ensure Sustainable Growth of the Russian Еconomy

Economics taxes & law ◽

10.26794/1999-849x-2019-12-3-86-92 ◽

2019 ◽

Vol 12 (3) ◽

pp. 86-92

Author(s):

T. I. Minina ◽

V. V. Skalkin

Keyword(s):

Economic Growth ◽

Monetary Policy ◽

Financial Sector ◽

Developed Countries ◽

Sustainable Growth ◽

Necessary Condition ◽

Real Sector ◽

Financial Instruments ◽

The Real ◽

The Impact

Russia’s entry into the top five economies of the world depends, among other things, on the development of the financial sector, being a necessary condition for the economic growth of a developed macroeconomic and macro-financial system. The financial sector represents a system of relationships for the effective collection and distribution of economic resources, their deployment according to public demand, reducing the risk of overproduction and overheating of the economy.Therefore, the subject of the research is the financial sector of the Russian economy.The purpose of the research was to formulate an approach to alleviating the risks of increasing financial costs in the real sector of the economy by reducing the impact of endogenous risks expressed as financial asset “bubbles” using the experience of developed countries in the monetary policy.The paper analyzes a macroeconomic model applied to the financial sector. It is established that the economic growth is determined by the growth and, more important, the qualitative development of the financial sector, which leads to two phenomena: overproduction in the real sector and an increase in asset prices in the financial sector, with a debt load in both the real and financial sectors. This results in decreasing the interest rate of the mega-regulator to near-zero values. In this case, since the mechanisms of the conventional monetary policy do not work, the unconventional monetary policy is used when the mega-regulator buys out derivative financial instruments from systemically important institutions. As a conclusion, given deflationally low rates, it is proposed that the megaregulator should issue its own derivative financial instruments and place them in the financial market.

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Financial system and growth and economic development

VUZF Review ◽

10.38188/2534-9228.21.2.19 ◽

2021 ◽

Vol 6 (2) ◽

pp. 160-170

Author(s):

Małgorzata Hala

Keyword(s):

Economic Growth ◽

Economic System ◽

Financial Institutions ◽

Financial System ◽

Financial Sector ◽

Real Sector ◽

The Real ◽

State And Local ◽

The Impact

The aim of the article is to present the role of the financial system in economic growth and development. The first part presents the traditional understanding of the relationship between the economic system and economic growth. The second part presents the experience of financial crises and their impact on the conversation on the mutual relations between the financial sector and the real sector. The third part shows the role of the state in the financial system. The article describes the arrangement of interrelated financial institutions, financial markets and elements of the financial system infrastructure. It shows what part of the economic system the financial system is, and whether it enables the provision of services allowing the circulation of purchasing power throughout the economy. The article presents the important role of the financial system, the role related to the transfer of capital from entities with savings to entities that need capital for investments. It shows the financial system as a set of logically related organizational forms, legal acts, financial institutions and other elements enabling entities to establish financial relations in the real sector and the financial sector, and this system forms the basis of activity for entities using money, enabling the conclusion of various economic transactions, in which money performs various functions. The article also presents the concept of a financial crisis as a situation in which there are rapid changes in the financial market, usually associated with insufficient liquidity or insolvency of banks or financial institutions, and as a result, a decrease in production or its deepening. The article also includes issues related to the impact of public authorities (state and local authorities) on the financial system in the economy.

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The Role of Bank Lending in the Development of Ukraine’s Economy

THE PROBLEMS OF ECONOMY ◽

10.32983/2222-0712-2020-3-176-183 ◽

2020 ◽

Vol 3 (45) ◽

pp. 176-183

Author(s):

V. M. Kremen ◽

◽

O. I. Kremen ◽

L. P. Huliaieva ◽

◽

...

Keyword(s):

Capital Investment ◽

Bank Lending ◽

Real Sector ◽

The Real ◽

Goods And Services ◽

Estate Property ◽

The Impact ◽

The Relationship ◽

Average Monthly Salary ◽

Monthly Salary

The purpose of the article is to analyze the situation with bank lending to the real sector and its impact on the development of Ukraine’s economy. In order to effect this purpose, the following tasks have been fulfilled: to analyze the dynamics of the total bank lending to the real sector, to analyze the structure of bank lending to non-financial corporations by loan terms and by currency; to determine the volume of loans granted to non-financial corporations in order to buy, build and reconstruct real estate property. To carry out in-depth assessment of the impact made by bank lending to the real sector on economic development, a correlation and regression analysis has been made, revealing that the increase in bank lending to non-financial corporations leads to the growth of the GDP, industrial output (in goods and services), exports, capital investment and average monthly salary and wages. It also reduces the amount of man-power employed, which may serve as the evidence of production intensification and automation caused by using loan proceeds. The polynomial function most appropriately describes the relationship between the volume of bank lending to non-financial corporations and GDP, exports and employment in 2005-2019, and the exponential function most adequately describes the relationship between the volume of bank lending to non-financial corporations and capital investment and the average monthly salary and wages.

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Does Industrial Agglomeration or Foreign Direct Investment Matter for Environment Pollution of Public Health? Evidence From China

Frontiers in Public Health ◽

10.3389/fpubh.2021.711033 ◽

2021 ◽

Vol 9 ◽

Author(s):

Shi-Jie Li ◽

Bin Sun ◽

Ding-Xia Hou ◽

Wei-Jian Jin ◽

Yun Ji

Keyword(s):

Public Health ◽

Economic Growth ◽

Foreign Direct Investment ◽

Environmental Pollution ◽

Foreign Investment ◽

Direct Investment ◽

Industrial Agglomeration ◽

Improvement Effect ◽

The Impact ◽

The Relationship

This article focuses on the interaction between China's industrial agglomeration, foreign direct investment (FDI) and environmental pollution of public health in the past 15 years. By conducting theoretical and empirical research, we try to reveal the relationship and mechanism between the economic growth and public health from the perspective of environmental pollution. By constructing an embedded theoretical model of industrial agglomeration and FDI, this article combines other environmental pollution influencing factors, expounds the impact mechanism of industrial agglomeration on environmental pollution. Based on the provincial-level panel data of China on environmental pollution and industrial agglomeration, the empirical test is carried out through the threshold panel regression model. According to the results, industrial agglomeration can significantly rectify the regional environmental pollution, thereby benefiting public health. FDI has a phased impact on the relationship between industrial agglomeration and environmental pollution. Specifically, when the level of FDI is low, the positive improvement effect of industrial agglomeration on environmental pollution is relatively strong. This is mainly because industrial agglomeration can promote economic growth, technological progress, and enhance environmental awareness. When the level of FDI exceeds the first threshold and continues to rise, the positive improvement effect of industrial agglomeration is maximized. Before the level of FDI exceeds the second threshold, this effect gradually weakens. The population concentration and excessive expansion of city scale brought about by industrial agglomeration will lead to the increase of regional resource and energy consumption, thus aggravating environmental pollution. The policy implication is that while the government and enterprises are vigorously increasing the level of foreign investment, they must pay equal attention to economic growth and public health, and the level of industrial agglomeration should match the level of foreign investment so as to give full play to the positive improvement effect of industrial agglomeration on environmental pollution, and realize the coordinated development of the regional economy, environment and population health.

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Test by the SVECM model of the impact of the exchange rates and foreign direct investment on the economic growth of the Maghreb region

Economics of Development ◽

10.21511/ed.19(1).2020.01 ◽

2020 ◽

Vol 19 (1) ◽

pp. 1-14

Author(s):

Affes Yossor ◽

Kalai Maha

Keyword(s):

Economic Growth ◽

Foreign Direct Investment ◽

Exchange Rates ◽

Direct Investment ◽

Structural Model ◽

Added Value ◽

The Real ◽

Cyclical Fluctuations ◽

Regional Dynamics ◽

The Impact

The purpose of this article is to identify the main sources of cyclical fluctuations affecting the five Maghreb countries in a general analysis framework through the impact of the exchange rates and foreign direct investment. Besides, will consider in this study a set of variables taking into account the real monetary and fi ancial dimensions of the economies. Therefore, authors have adopted an approach in terms of the VECM Structural model and analyzed the robustness of the response functions. Indeed, the estimation results showed the existence of a regional dynamics where the respective sensitivity to change of the real exchange rate is the same. In addition, FDI and REER stimulate economic growth of the Maghreb economies in exchange for regime transmutations. In addition, the participation of FDI in the socio-economic development seems to be weak without the implementation of a policy of support and guidance aimed at reducing the catastrophic effects on the economy and reorienting its investments towards sectors with a high added value.

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Debt-oriented Capital Structure and Economic Growth: Panel Evidence for OECD Countries

European Review ◽

10.1017/s1062798719000139 ◽

2019 ◽

Vol 27 (4) ◽

pp. 519-542

Author(s):

Syed Munawar Shah ◽

Mariani Abdul-Majid ◽

Zulkefly Abdul Karim

Keyword(s):

Economic Growth ◽

Panel Data ◽

Capital Structure ◽

Direct Relationship ◽

Oecd Countries ◽

European Countries ◽

Real Sector ◽

The Real ◽

The Relationship

This paper examines the relationship between debt-oriented capital structure and economic growth by analysing a panel data of 16 European countries, based on the availability of data. We find that the corporate leverage in financial and non-financial corporations affects economic growth negatively. Furthermore, the results indicate that the leverage in non-financial corporations affects economic growth more than the leverage in financial corporations. This is due to the direct relationship between economic growth and the real sector and the fact that non-financial corporations in OECD countries hold more debt as compared with financial corporations.

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Does foreign direct investment affect economic growth? The case of Turkey

International Journal of Social Economics ◽

10.1108/ijse-02-2012-0173 ◽

2014 ◽

Vol 41 (6) ◽

pp. 434-449 ◽

Cited By ~ 7

Author(s):

Birgül Cambazoglu ◽

Hacer Simay Karaalp

Keyword(s):

Economic Growth ◽

Foreign Direct Investment ◽

International Trade ◽

Direct Investment ◽

Growth Strategy ◽

Volume Index ◽

Outward Fdi ◽

Content Type ◽

The Real ◽

The Impact

Purpose – The purpose of this paper is to analyze the impact of inward foreign direct investment (FDI) and international trade on economic growth in Turkey for the post-liberalization period (1980-2010). Design/methodology/approach – The paper employs the vector auto-regression model with four variables: real GDP growth, real inward FDI, the real import volume index and the real export volume index. Findings – Empirical results suggest a relationship between economic growth, inward FDI and exports. Practical implications – The results derived in this paper shed light on the relationship between FDI and international trade on economic growth for Turkey, which has been applying an export-led growth strategy since 1980, and has been implementing many regulations to attract foreign capital. It is evident that although Turkey's efforts and the importance of this issue, new policies and stabilization regulations must be established for the Turkish economy. Originality/value – This study contributes to the literature in at least two aspects. First, a comparative analysis of Turkey's inward and outward FDI with respect to different country groups was analyzed. Second, apart from other studies, the effect of inward FDI and international trade on Turkey's economic growth was tested utilizing an econometric method from 1980 to 2010, which is a relatively long time period for Turkey.

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The Effect of Foreign Direct Investment on Indonesia’s Economic Growth

Jurnal Ekonomi dan Bisnis Indonesia ◽

10.37673/jebi.v1i2.1 ◽

2016 ◽

Vol 1 (2) ◽

pp. 18-24

Author(s):

Abdul Hadi Ilman

Keyword(s):

Economic Growth ◽

Foreign Direct Investment ◽

Direct Investment ◽

Time Series Data ◽

Series Data ◽

Linear Regression Method ◽

Domestic Investment ◽

Relationship Of ◽

The Impact ◽

The Relationship

The relationship of Foreign Direct Investment (FDI) on economic growth is one of the most debatable topic in economic. This study is aiming to investigate the impact of FDI on economic growth in Indonesia. This research using linear regression method which base on time series data from 1981 to 2012. A Major finding is there is no special relationship between FDI and economic growth, both directly and indirectly. Moreover, FDI does crowd-in the domestic investment and is no significance evidence to prove that FDI is more efficient on economic growth than domestic investment.

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Public education expenditure and economic growth: based on panel data from 2009 to 2019 in China

World Journal of Advanced Research and Reviews ◽

10.30574/wjarr.2021.11.2.0376 ◽

2021 ◽

Vol 11 (2) ◽

pp. 184-192

Author(s):

Yao Liu ◽

Ziru Tan ◽

Xiaohua Ning

Keyword(s):

Economic Growth ◽

Public Education ◽

Tertiary Education ◽

Education Expenditure ◽

Education Development ◽

Financial Investment ◽

Public Education Expenditure ◽

The Impact ◽

The Relationship ◽

Expenditure Structure

Public education expenditure is the largest public expenditure and the foundation of education development in China. This paper uses Cobb-Douglas production function model to analyze the relationship between public education expenditure and China's economic growth, and explores the impact of the proportion of public education expenditure in primary, secondary and tertiary education expenditure on economic growth. The results show that public education expenditure has a positive effect on economic growth, and that secondary education accounts for the largest contribution to economic growth, followed by higher education and primary education. The research results suggest that China should increase financial investment in education and optimize the expenditure structure of three-level education.

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The Impact of FDI Inflows, Exports and Domestic Investment on Economic Growth in Africa

Journal of Economics and Behavioral Studies ◽

10.22610/jebs.v10i4(j).2415 ◽

2018 ◽

Vol 10 (4(J)) ◽

pp. 152-164

Author(s):

Alexander Maune

Keyword(s):

Economic Growth ◽

Foreign Direct Investment ◽

Direct Investment ◽

Mean Squared Error ◽

Domestic Investment ◽

African Countries ◽

Socioeconomic Changes ◽

Research Findings ◽

The Impact ◽

The Relationship

The topic regarding the impact of foreign direct investment net inflows, exports and domestic investment on economic growth has resulted in mixed research findings across the globe. Literature related to the above variables in five selected African countries drawn from the five sub-regions is critically reviewed in this article. Furthermore, an econometric analysis of these variables is done to ascertain their impact on economic growth. The findings are compared to previous findings in other studies. The researcher found similar results in some variables when compared to previous researches in other countries. The study found that the independent statistical variables significantly predicted gross domestic product, with F (3, 63) = 5.84, P > F 0.0014, R2 = 0.2176, adjusted R2 = 0.1804 and root mean squared error (RMSE) = 0.54976. The independent variables added significantly to the prediction of p < 0.05. The researcher challenges the notion that the impact of foreign direct investment net inflows, exports and domestic investment on economic growth should always be positive and significant. This study provides a refreshed appreciation of the relationship between foreign direct investment net inflows, exports, domestic investment and economic growth in light of rapid socioeconomic changes in the sampled countries. The article also proposes some critical considerations regarding this relationship.

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