scholarly journals The Influence of Central Bank Interest Rate, Real Exchange Rate, Economic Growth and Foreign Direct Investment on Current Account in G7 Countries

2020 ◽  
Author(s):  
Fajar Budiman ◽  
Sri Ulfa Sentosa
Keyword(s):  
Economic Growth ◽  
Foreign Direct Investment ◽  
Exchange Rate ◽  
Interest Rate ◽  
Central Bank ◽  
Real Exchange Rate ◽  
Current Account ◽  
Direct Investment ◽  
G7 Countries

scholarly journals Exchange Rate Volatility and Foreign Direct Investment

2020 ◽  
Vol 12 (3) ◽  
pp. 38
Author(s):  
Samuel Erasmus Alnaa ◽  
Ferdinand Ahiakpor
Keyword(s):  
Foreign Direct Investment ◽  
Exchange Rate ◽  
Interest Rate ◽  
Gross Domestic Product ◽  
Real Exchange Rate ◽  
Direct Investment ◽  
Exchange Rate Volatility ◽  
External Factors ◽  
Conditional Heteroskedasticity ◽  
Data Set

The paper seeks to determine the effect of exchange rate volatility on foreign direct investment in Ghana from 1986 to 2017. The study adopted the Generalized Autoregressive Conditional Heteroskedasticity model to fit the data set from 1986-2017. The results indicate that, previous quarter information can influence current quarter volatility in Foreign Direct Investment. Real exchange rate, gross domestic product and treasure bill rate considered as external factors, are all found to be significant. This shows that, volatility from these factors can spillover to volatility in foreign direct investment.  To ensure stable inflow of foreign direct investment, we recommend that policies should gear towards stability in the forex market and interest rate among others.

scholarly journals Trade Openness and Economic Growth Nexus in Pakistan

2020 ◽  
Vol V (III) ◽  
pp. 22-33
Author(s):  
Ghulam Yahya Khan ◽  
Muhammad Masood Anwar ◽  
Aftab Anwar
Keyword(s):  
Economic Growth ◽  
Foreign Direct Investment ◽  
Exchange Rate ◽  
Interest Rate ◽  
Granger Causality ◽  
Direct Investment ◽  
Trade Openness ◽  
Explanatory Variables ◽  
Integration Approach ◽  
Long Run

This study explores the nexus amongst trade openness and economic growth for Pakistan for 1981-2019. Trade-openness is a dependent variable, and it is measured as imports plus exports to GDP ratio. Economic growth, Foreign Direct Investment, Inflation, Exchange rate, and interest rate are taken as explanatory variables. Co-integration approach by Johansen and Juselius (1988, 1991) has been used for long-run relationships. Results indicate that Trade-Openness has significantly affected the economic growth and other control variables of the study for Pakistan. There exist bidirectional Granger Causality in the selected variables.

scholarly journals Current account determinants in ASEAN 6

2018 ◽  
Vol 21 (2) ◽  
Author(s):  
Novi Ariyani ◽  
Fajar Wahyu Priyanto ◽  
Lilis Yuliati
Keyword(s):  
Foreign Direct Investment ◽  
Exchange Rate ◽  
Interest Rate ◽  
Gross Domestic Product ◽  
Current Account ◽  
Direct Investment ◽  
Domestic Product ◽  
Annual Data ◽  
The Current Account

This study aims to analyze the factors that influence the export activity in the ASEAN region countries such as Indonesia, Singapore, Thailand, Malaysia, Philippines and Vietnam during 2001 - 2016 by using annual data. The factors that influence gross domestic product (GDP), interest rate, foreign direct investment (FDI) and exchange rate. The method used in the research is panel Vector Error Correlation Model (PVECM). The results show that Gross Domestic Product (GDP) negatively affects the current account in the short term. The interest rate variable negatively affects the current account in the long term. The Foreign Direct Investment (FDI) variable negatively affects the current account in the long term. Furthermore, the exchange rate variable negatively affects the current account in the long term.

scholarly journals Analysis of Current Account and Real Exchange Rate: Lower Middle Income Countries in Association of Southeast Asian Nations

2019 ◽  
Vol 8 (5C) ◽  
pp. 662-668
Keyword(s):  
Foreign Direct Investment ◽  
Exchange Rate ◽  
Exchange Rates ◽  
Real Exchange Rate ◽  
Current Account ◽  
Direct Investment ◽  
Real Exchange Rates ◽  
Middle Income ◽  
Negative Effect ◽  
Positive Effect

The study investigates the simultaneous equation model of the current account and real exchange rates in group of lower middle income in Association of Southeast Asian Nations (ASEAN). This study uses time series from 2000-2017 (18 years) and cross section 6 countries (Indonesia, Philippines, Vietnam, Lao, Myanmar, and Cambodia). There are three important findings in this study; first, for the current account is financial development has positive effect while government spending and foreign direct investment have negative effect; second, for the real exchange rate is economic openness, money supply, and interest rate have positive effect while foreign direct investment and current account have negative effect; third, only current account affects real exchange rates. Therefore, it is highly recommended for group of lower middle income in ASEAN to intervene in monetary policy variables so that uncontrolled deficits and fluctuations can achieve equilibrium in group of lower middle income in ASEAN.

scholarly journals Trade Openness and Economic Growth Nexus in Pakistan

2020 ◽  
Vol V (IV) ◽  
pp. 24-33
Author(s):  
Ghulam Yahya Khan ◽  
Muhammad Masood Anwar ◽  
Aftab Anwar
Keyword(s):  
Economic Growth ◽  
Foreign Direct Investment ◽  
Exchange Rate ◽  
Interest Rate ◽  
Granger Causality ◽  
Direct Investment ◽  
Trade Openness ◽  
Explanatory Variables ◽  
Integration Approach ◽  
Long Run

This study explores the nexus amongst trade openness and economic growth for Pakistan for 1981-2019. Trade-openness is a dependent variable, and it is measured as imports plus exports to GDP ratio. Economic growth, Foreign Direct Investment, Inflation, Exchange rate, and interest rate are taken as explanatory variables. Co-integration approach by Johansen and Juselius (1988, 1991) has been used for long-run relationships. Results indicate that Trade-Openness has significantly affected the economic growth and other control variables of the study for Pakistan. There exist bidirectional Granger Causality in the selected variables.

scholarly journals Relationship between Real Exchange Rate and Economic Growth: the case of South Africa

2018 ◽  
Vol 10 (1) ◽  
pp. 146
Author(s):  
Deeviya Patel ◽  
Gisele Mah
Keyword(s):  
Economic Growth ◽  
South Africa ◽  
Foreign Direct Investment ◽  
Exchange Rate ◽  
Real Exchange Rate ◽  
Granger Causality ◽  
Money Supply ◽  
Significant Relationship ◽  
Direct Investment ◽  
Variance Decomposition

The objective of this study was to investigate the relationship between real exchange rate and economic growth in South Africa. Using time series data, the period from 1980 to 2015 was covered in the study. Data was collected from the South African Reserve Bank, the International Monetary Fund and International Financial Statistics. The Johansen cointegration and the Vector Error Correction Model estimation techniques were employed in the study, followed by VEC Granger causality test, variance decomposition and impulse response function. The long-run results revealed a negative and significant relationship between real exchange rate with export and economic growth. On the other hand, money supply and foreign direct investment have a positive and significant relationship with real exchange rate. Only export was significant and positively related to real exchange rate in the short-run.  Results of granger causality showed that only export granger causes real exchange rate thus, a unidirectional causality exists between export and real exchange rate. Results of variance decomposition revealed that the real exchange rate is highly affected by shocks from economic growth. The impulse response functions showed that real exchange rate responds positively to shocks from real exchange rate and money supply. On the contrary, real exchange rate responds negatively to a shock from economic growth. There is, therefore, a need to increase exports, money supply, foreign direct investment and economic growth as these would lead to an increase in the Rand and consequently, appreciation of the Rand.  

scholarly journals Determinants and Causality of Current Account Balance and Foreign Direct Investment: Lower Middle Income Countries in ASEAN

2020 ◽  
Author(s):  
Hasdi Aimon ◽  
Anggi Putri Kurniadi ◽  
Sri Ulfa Sentosa
Keyword(s):  
Foreign Direct Investment ◽  
Exchange Rate ◽  
Real Exchange Rate ◽  
Current Account ◽  
Direct Investment ◽  
Current Account Balance ◽  
Middle Income ◽  
Middle Income Countries ◽  
Real Gdp ◽  
Foreign Direct Investment Determinants

This study investigates the determinants and causality between current account balance and foreign direct investment in Association of Southeast Asian Nations (ASEAN) in lower middle income countries. This study uses time series from 2000-2017 and cross section of 6 countries, namely Indonesia, Philippines, Vietnam, Lao, Myanmar and Cambodia, which were analyzed using simultaneous equation model approach. There are three important findings in this study. First, current account balance is positively affected by financial development, government expenditure, real GDP and real exchange rate, while negatively affected by foreign direct investment. Second, foreign direct investment is positively affected by real GDP, real exchange rate, economic openness and current account balance, while negatively affected by inflation. Third, there is a causal relationship between current account balance and foreign direct investment, which the two variables significantly influence each other. Therefore, it is highly recommended for lower middle income countries in ASEAN to intervene in macroeconomic policy variables, so that the deficit conditions for current account balance and foreign direct investment can be reduced in the lower middle income countries in ASEAN. Keywords: current account balance, foreign direct investment, determinants, causality, lower middle income countries, ASEAN.

scholarly journals Relationship between Real Exchange Rate and Economic Growth: the case of South Africa

2018 ◽  
Vol 10 (1(J)) ◽  
pp. 146-158
Author(s):  
Deeviya Patel ◽  
Gisele Mah
Keyword(s):  
Economic Growth ◽  
South Africa ◽  
Foreign Direct Investment ◽  
Exchange Rate ◽  
Real Exchange Rate ◽  
Granger Causality ◽  
Money Supply ◽  
Significant Relationship ◽  
Direct Investment ◽  
Variance Decomposition

The objective of this study was to investigate the relationship between real exchange rate and economic growth in South Africa. Using time series data, the period from 1980 to 2015 was covered in the study. Data was collected from the South African Reserve Bank, the International Monetary Fund and International Financial Statistics. The Johansen cointegration and the Vector Error Correction Model estimation techniques were employed in the study, followed by VEC Granger causality test, variance decomposition and impulse response function. The long-run results revealed a negative and significant relationship between real exchange rate with export and economic growth. On the other hand, money supply and foreign direct investment have a positive and significant relationship with real exchange rate. Only export was significant and positively related to real exchange rate in the short-run.  Results of granger causality showed that only export granger causes real exchange rate thus, a unidirectional causality exists between export and real exchange rate. Results of variance decomposition revealed that the real exchange rate is highly affected by shocks from economic growth. The impulse response functions showed that real exchange rate responds positively to shocks from real exchange rate and money supply. On the contrary, real exchange rate responds negatively to a shock from economic growth. There is, therefore, a need to increase exports, money supply, foreign direct investment and economic growth as these would lead to an increase in the Rand and consequently, appreciation of the Rand.  

scholarly journals The Foreign Direct Investment and Economic Growth - Case Study for Kosovo

2015 ◽  
Vol 5 (2) ◽  
pp. 27
Author(s):  
Dr.Sc. Myrvete Badivuku - Pantina ◽  
MSc. Jeton Zogjani
Keyword(s):  
Economic Growth ◽  
Foreign Direct Investment ◽  
Exchange Rate ◽  
Interest Rate ◽  
Direct Investment ◽  
Political Stability ◽  
Research Paper ◽  
Positive Relation ◽  
Fair Competition ◽  
The Impact

This research paper will explain the impact and relationship between the Foreign Direct Investment (FDI) and economic growth, Kosovo case. The used data in research are secondary data and cover a period of time between 2008 and 2013. By using STATA program for calculation and by various regression analyses (descriptive statistics, linear regression and correlation) relationships have been identified between involved variables in research, where economic growth is defined as dependent variable, whereas FDI, interest rate and real effective and exchange rate (REER) are defined as independent variables. The main results in this research paper indicate that FDI has a positive relation (0.011) but non-significant effect (T<2) on economic growth while the interest rate has a positive relation (0.076) and a significant effect (T>2) on economic growth in Kosovo. The real effective exchange rate has a negative (-0.347) and non-significant relation (T<2) with economic growth. The main activities of FDI in overall Kosovo's economy are: real estate, transport and telecommunication, financial and manufacture services, construction, etc. The main conclusion is that the Kosovo institutions should create a favorable environment, such as: political stability, enforcement of justice, reduction of trade barriers, Kosovo should also create appropriate policy for protection of foreign investors, investment security, fair competition and institutional support. This will impact the drastic improvement and increase of FDI. In 2013 Kosovo had an FDI percentage of 5% of GDP while in 2007 it was over 13% of Kosovo's GDP.

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