Institutional Quality, School Enrolment and Mobile Subscribers in Economic Community of West African States (ECOWAS-5): Impact on FDI using Panel Data

Basically, the quality of institution, human capital (schoolenrolment) and infrastructure (mobile subscribers) are significant determinants of foreign direct investment (FDI). With exception of few studies on corruption, however, empirical research on the link between infrastructure, human capital and FDI remain limited. Particularly in the context of Economic Community of West African States (ECOWAS). This paper aims to examine the linkage between infrastructure (mobile subscribers, corruption, schoolenrolment), and Foreign Direct Investment (FDI) among selected ECOWAS countries using panel data techniques for the period of 1990-2015. The methodology carried out to achieve this objective involves the panel unit root, panel cointegration and fully modified ordinary least square (FMOLS). The result indicates that, there is long run relationship among the series. Corruption and infrastructure are negatively significantly related with FDI at the long run in the selected ECOWAS countries. The empirical evidence indicates that feeble level of institutions (corruption) and infrastructure impedes FDI inflows in the selected ECOWAS countries. The results confirm that FDI enhancement through role of institution, schoolenrolment and infrastructure (mobile subscribers) exist not only in the transition nation but also in the selected ECOWAS countries.

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Foreign Direct Investment Inward and Foreign Direct Investment Outward: Evidence from Panel Unit Root and Cointegration Tests with a Certain Number of Structural Changes

Global Economy Journal ◽

10.2202/1524-5861.1314 ◽

2008 ◽

Vol 8 (1) ◽

pp. 1850125

Author(s):

Nicholas Apergis

Keyword(s):

Foreign Direct Investment ◽

Panel Data ◽

Unit Root ◽

Direct Investment ◽

Structural Changes ◽

Panel Cointegration ◽

Data Set ◽

Panel Unit Root ◽

Long Run ◽

Cointegration Tests

This article examines empirically the association between foreign direct investment inward and foreign direct investment outward. Using a panel data set for 35 economies over the period 1981-2004 as well as the methodology of panel unit root and panel cointegration tests with a certain number of structural changes, the empirical findings show that FDI inward does exhibit a significant (long-run) relationship with FDI outward.

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Foreign direct investment and pollution havens: evidence from African countries

Archives of Business Research ◽

10.14738/abr.712.7531 ◽

2020 ◽

Vol 7 (12) ◽

pp. 244-252

Author(s):

SAID GHARNIT ◽

Mohamed Bouzahzah ◽

Jihad Ait Soussane

Keyword(s):

Carbon Dioxide ◽

Foreign Direct Investment ◽

Carbon Dioxide Emissions ◽

Direct Investment ◽

Least Square ◽

Pollution Haven Hypothesis ◽

African Countries ◽

Fdi Inflows ◽

Ordinary Least Square ◽

Long Run

This study examines the relationship between foreign direct investment (FDI) inflows and carbon dioxide emissions (CE) in order to investigate the validity of the pollution haven hypothesis for 54 African countries, using cointegration approach with dynamic panel data over the period 1960-2018. Based on the panel cointegration analysis, it was concluded that the variables are cointegrated. Moreover, the Dynamic Ordinary Least Square (DOLS) and Fully Modified Ordinary Least Square (FMOLS) results showed that foreign direct investment inflows have a long-run positive relationship with carbon dioxide emissions. Furthermore, according to Granger-Engle causality test results, FDI inflows and carbon dioxide emissions have a positive causal relationship, for both short-run and long-run. Thus, the results of this study validate the pollution haven hypothesis in the African countries. Nevertheless, it is recommended to keep attracting foreign direct investment inflows alongside of implementing mechanisms and instruments for reducing the CO2 emissions under strong environmental policies.

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Foreign Direct Investment and Growth Nexus: Further Evidence from Africa’s Largest Economy

Journal of Infrastructure Development ◽

10.1177/09749306211024433 ◽

2021 ◽

Vol 13 (1) ◽

pp. 65-78

Author(s):

Anthony Orji ◽

Godson Umunna Nwagu ◽

Jonathan E. Ogbuabor ◽

Onyinye I. Anthony-Orji

Keyword(s):

Economic Growth ◽

Foreign Direct Investment ◽

Direct Investment ◽

Labour Force ◽

Jel Classification ◽

Least Square ◽

Ordinary Least Square ◽

Distributed Lag ◽

Autoregressive Distributed Lag ◽

Long Run

The study investigated the effect of foreign direct investment (FDI) on economic growth in Nigeria, which is currently Africa’s largest economy, and also determined the long-run relationship between FDI and economic growth in Nigeria from 1981 to 2017. The study adopted the autoregressive distributed lag modelling approach and ordinary least square in the analysis. The empirical results revealed that FDI has a positive and significant relationship with economic growth in Nigeria within the period under review. The study concluded and recommended that Nigerian Government should formulate policies that will attract more FDI in all sectors of the economy especially in the service and manufacturing sectors, so as to improve the infrastructural facilities and production of goods in the country and also expand its labour force. Finally, there is need to improve the educational policy of the country in order to raise the stock of human capital in the country that will make useful policies for the attraction for productive FDIs in the country. JEL Classification: E22, F21, F23, F43

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Analysis of Foreign Direct Investment and Economic Growth in Nigeria: Application of Spatial Econometrics and Fully Modified Ordinary Least Square (FMOLS)

Foreign Trade Review ◽

10.1177/0015732519851631 ◽

2019 ◽

Vol 54 (3) ◽

pp. 159-176 ◽

Cited By ~ 1

Author(s):

Olabode Philip Olofin ◽

Oluwole Oladipo Aiyegbusi ◽

Abayomi Ayinla Adebayo

Keyword(s):

Economic Growth ◽

Human Capital ◽

Foreign Direct Investment ◽

Direct Investment ◽

Capital Formation ◽

Least Square ◽

Income Growth ◽

Tax Revenue ◽

Ordinary Least Square ◽

Determinants Of Fdi

Based on the controversy surrounding the determinants of foreign direct investment (FDI) inflow from one country to another and the suggestion that inflow of FDI might be a result of countries’ locations, this study therefore revisits the determinants of FDI and economic growth by testing for the roles of country’s location in the determination of the inflow of FDI to Nigeria. Unlike other studies, this study finds that countries’ locations do not play any significant role in determining FDI inflow to Nigeria. The study, therefore, employs fully modified ordinary least square (FMOLS) to examine the determinants of FDI in Nigeria. The FMOLS results show that FDI, manufacturing sector, tax revenue, financial development, health expenditure, net trade and human capital have a positive relationship with income growth. These results were statistically significant except for tax revenue, net trade and human capital. These results support the argument that these variables are important determinants of economic growth. The article also finds a negative and statistically significant relationship among FDI, income growth, import and capital formation. These results are in conformity with economic theory in the sense that import of goods and services constitutes a leakage in the economy. Negative impact of capital formation and security could be associated with the prevailing high level of corruption, sharing of security votes and misappropriation of funds among the public officials in Nigeria. JEL Codes: F23, F26, F21, H24

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Nexus between FDI, Infrastructure Investment, Tourism Revenues, and Economic Growth: Mega Event Evidence

Emerging Science Journal ◽

10.28991/esj-2021-01323 ◽

2021 ◽

Vol 5 (6) ◽

pp. 953-963

Author(s):

Mustafa Mohammad Alalawneh ◽

Jeyhun Mammadov ◽

Ameen Alqasem

Keyword(s):

Economic Growth ◽

Foreign Direct Investment ◽

Direct Investment ◽

Least Square ◽

Ordinary Least Square ◽

Mega Events ◽

Long Run ◽

Equilibrium Relationships ◽

Macro Variables ◽

Mega Event

The object of this study is to examine the response of economic growth in Germany to 2006 FIFA World Cup hosting (represented by the heavily influenced variables of this huge event: Growth of Infrastructure Spending, Tourism Revenues, and Foreign Direct investment) during the period (2000 – 2017). The study employed Dynamic Ordinary Least Square (DOLS) approach to estimate the long-run equilibrium relationships amongst the variables. The results indicate that there is a co-integrating long-run relationship among the studied variables and provide empirical evidence showing that an increase in the growth of infrastructure spending (GINFR) 1 unit leads to an increase in the growth of GDP (GGDP) by 0.374 unit, an increase in the tourism revenues (TR) 1 unit leads to increase in the growth of GDP (GGDP) by 0.155 unit, and an increase in foreign direct investment (FDI) 1 unit leads to an increase in the growth of GDP (GGDP) by 0.055 unit. What distinguishes this paper is that it is one of the rare studies that went beyond the short effect of mega-events on the host country and investigated the long-term economic impact of the most important macro variables associated with mega-events on economic growth. Doi: 10.28991/esj-2021-01323 Full Text: PDF

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Does Foreign Direct Investment Influence Renewable Energy Consumption? Empirical Evidence from South Asian Countries

Energies ◽

10.3390/en14123470 ◽

2021 ◽

Vol 14 (12) ◽

pp. 3470

Author(s):

Xueqing Kang ◽

Farman Ullah Khan ◽

Raza Ullah ◽

Muhammad Arif ◽

Shams Ur Rehman ◽

...

Keyword(s):

Foreign Direct Investment ◽

Renewable Energy ◽

Sri Lanka ◽

South Asian ◽

Environmental Sustainability ◽

Direct Investment ◽

Least Square ◽

Asian Countries ◽

Ordinary Least Square ◽

The Relationship

In selected South Asian countries, the study intends to investigate the relationship between urban population (UP), carbon dioxide (CO2), trade openness (TO), gross domestic product (GDP), foreign direct investment (FDI), and renewable energy (RE). Fully modified ordinary least square (FMOLS) and dynamic ordinary least square (DOLS) models for estimation were used in the study, which covered yearly data from 1990 to 2019. We used Levin–Lin–Chu, Im–Pesaran–Shin, and Fisher PP tests for the stationarity of the variables. The outcomes of the panel cointegration approach looked at whether there was a long-run equilibrium nexus between selected variables in Pakistan, Bangladesh, India, and Sri Lanka. The FMOLS approach was also used to assess the relationship, and the results suggest that there is a significant and negative nexus between FDI and renewable energy in south Asian nations. The study’s findings reveal a strong and favorable relationship between GDP and renewable energy use. In South Asian nations (Sri Lanka, Pakistan, India, and Bangladesh), the FMOLS and DOLS findings are nearly identical, but the authors used the DOLS model for robustification. According to the findings, policymakers in South Asian economies (Sri Lanka, Pakistan, India, and Bangladesh) should view GDP and FDI as fundamental policy instruments for environmental sustainability. To reduce reliance on hazardous energy sources, the government should also reassure financial sectors to participate in renewable energy.

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Trade Balance and Exchange Rate in Thailand & the Implications for Vietnam: An Application using Instrumental Variable and the Heterogeneous Panel Cointegration Methods

Journal of Asian Business and Economic Studies ◽

10.24311/jabes/2016.23.1.04 ◽

2016 ◽

Vol 23 (01) ◽

pp. 137-160

Author(s):

Anh Vo The ◽

Duc Vo Hong

Keyword(s):

Exchange Rate ◽

Trade Balance ◽

Panel Cointegration ◽

Least Square ◽

Monetary Policies ◽

Ordinary Least Square ◽

Long Run ◽

Trading Partners ◽

The Exchange Rate ◽

Heterogeneous Panel

This study aims to investigate the link of trade balance and exchange rate for the case of Thailand in different aspects by initially attempting to examine what factors determine the trade balance in Thailand and then to test the long-run relationship between the exchange rate and Thailand’s trade balance. The empirical findings indicate that the exchange rate and relative growth rate of income play central roles in explaining Thailand’s trade balance, and fiscal and monetary policies are beneficial in some cases. Additionally, panel fully modified ordinary least square (FMOLS) estimations illustrate that a devaluation of Thailand Baht offers a significantly positive improvement on its trade balance in the long run, especially for the groups of countries with upper middle and high income in America and Europe. Individual FMOLS regressions of Thailand’s trade balance and each of its 62 trading partners suggest that a devaluation of Thailand’s currency would stimulate Thailand’s trade performance with over 20 trading partners, but hurt its performance with the other 10 countries and be inconclusive to the others.

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Panel Data Analysis of Financial Development, Trade Openness, and Economic Growth: Evidence from BRICS Countries

Emerging Economy Studies ◽

10.1177/2394901518767023 ◽

2018 ◽

Vol 4 (1) ◽

pp. 1-18 ◽

Cited By ~ 4

Author(s):

Ritu Rani ◽

Naresh Kumar

Keyword(s):

Economic Growth ◽

Trade Openness ◽

Panel Cointegration ◽

Least Square ◽

Cointegration Test ◽

Ordinary Least Square ◽

Brics Countries ◽

Long Run ◽

Panel Granger Causality ◽

Panel Cointegration Test

The purpose of this article is to investigate the possible cointegration and direction of causality between foreign direct investment (FDI) inflow, trade openness, and economic growth in BRICS countries using panel data from 1993 to 2015. Besides these variables, money supply and domestic credit (DC) to private players are also added in the model to examine the impact of financial openness on economic growth. The Pedroni’s panel cointegration test is used to examine the existence of long-run relationship, and coefficients of cointegration are examined by fully modified ordinary least square (FMOLS) and dynamic ordinary least square (DOLS). Further panel Granger causality test is used to examine the direction of causality among the competing variables. The results of Pedroni’s panel cointegration test indicate that there exists a long-run relationship among the variables under considerations in BRICS countries. The coefficient of FMOLS and DOLS indicates that trade openness has a positive impact on economic growth in BRICS countries while FDI inflow has a negative impact in these nations. In addition, the results of panel Granger causality confirmed bidirectional causality between FDI inflow and economic growth in the short run. The study recommends that BRICS countries should liberalize trade openness as it strengthens the position of member countries in the world economy.

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Impact of Trade Openness and Human Capital on Economic Growth: A Comparative Investigation of Asian Countries

Sustainability ◽

10.3390/su12072930 ◽

2020 ◽

Vol 12 (7) ◽

pp. 2930 ◽

Cited By ~ 4

Author(s):

Rabail Amna Intisar ◽

Muhammad Rizwan Yaseen ◽

Rakhshanda Kousar ◽

Muhammad Usman ◽

Muhammad Sohail Amjad Makhdum

Keyword(s):

Economic Growth ◽

Human Capital ◽

Negative Impact ◽

Trade Openness ◽

Least Square ◽

Ordinary Least Square ◽

Southern Asia ◽

Long Run ◽

Western Asia ◽

The Impact

The aim of this study is to analyze the impact of trade openness and human capital on economic growth in 19 Asian countries from 1985 to 2017. We selected two geographically distributed regions (Western and Southern Asia) based on difference in their GDP per capita. We applied the unit root tests to examine the level of stationarity and found that all variables were integrated at first difference. Kao and Fisher cointegration tests were employed and the results revealed the presence of a long-run relationship. We applied fully modified ordinary least square (FMOLS) and dynamic ordinary least square (DOLS) models to check the magnitude of the long-run coefficients among trade openness, human capital and economic growth. To investigate the direction of causality, we used a Dumitrescu and Hurlin (DH) causality test. The results indicated that trade openness and human capital have a significant and positive relationship while labor force participation has a negative effect on economic growth in Southern Asia, and in the case of Western Asia, the impact is positive. Foreign direct investment (FDI) has a negative and significant impact on GDP per capita (GDPPC) in Western Asia while it is positive and significant in Southern Asia; Total population (TPOP) has a negative impact on GDPPC in both regions. Furthermore, human capital has a positive and significant impact on trade openness in both panels. Meanwhile, labor force participation (LFP) has a positive and significant impact on trade openness in Southern Asia and a negative impact in the case of Western Asia. Trade openness and economic growth have bidirectional causality in Western Asia and unidirectional causality in Southern Asia. It also shows that human capital and economic growth have unidirectional causality in both regions.

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Empirical Analysis of Determinants of Economic Growth: Evidence from SAARC Countries

Journal of Economics and Behavioral Studies ◽

10.22610/jebs.v3i2.261 ◽

2011 ◽

Vol 3 (2) ◽

pp. 115-121

Author(s):

Muhammad Akram ◽

Syed Shabihul Hassan . ◽

Muhammad Farhan . ◽

Hassan Mobeen Alam .

Keyword(s):

Economic Growth ◽

Foreign Direct Investment ◽

South Asian ◽

Direct Investment ◽

Regional Cooperation ◽

Least Square ◽

Domestic Investment ◽

Ordinary Least Square ◽

Total Debt ◽

Determinants Of Economic Growth

This study investigates the factors that determine and enhance economic growth. The factors to determine the economic growth of South Asian Association for Regional Cooperation (SAARC) countries are foreign direct investment, total debt, gross domestic investment and inflation. Simple ordinary least square is applied to analyze the determinates of economic growth with the help of panel data for 39 years with annual frequency from 1971 to 2009. The economic growth may gain boost by the factors not only by these but also many others. In this study foreign direct investment and inflation are found having inverse relationship with economic growth while gross domestic investment and total debt are found positively associated with economic growth. This study may prove useful contribution for policy making for South Asian countries.

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