scholarly journals Sustainability and Society: Do Environmental, Social, and Governance Factors Matter for Foreign Direct Investment?

Energies ◽  
2021 ◽  
Vol 14 (19) ◽  
pp. 6039
Author(s):  
Niranjan Chipalkatti ◽  
Quan Vu Le ◽  
Meenakshi Rishi
Keyword(s):  
Foreign Direct Investment ◽  
Direct Investment ◽  
Good Governance ◽  
Current Trend ◽  
Sustainability Reporting ◽  
Sustainable Growth ◽  
Future Research ◽  
Middle Income ◽  
Fdi Inflows ◽  
Low And Middle Income

Sustainable investing allocates investments based on environmental, social and governance factors (ESG). The societal value of sustainable investment is becoming progressively relevant as investors are increasingly recognizing the importance of investing in companies that seek to combat climate change, environmental destruction, while promoting corporate responsibility. Environmental policy and sustainable growth initiatives at a country-level are also being influenced by the UN’s Sustainable Development Goals (SDGs). Situated within the current trend of declining foreign direct investment flows (FDI), our study examines the role of ESG factors in attracting FDI and enabling progress toward SDGs. We econometrically examine the linkages between ESG and FDI inflows for a sample of 161 counties. We also focus on low- and middle-income emerging economies and low- and middle-income commodity exporters as these countries face unique challenges of mobilizing financing to achieve SDGs and generating sustainable economic growth. Results suggest that FDI inflows to the full sample of countries are positively attracted by good governance in a destination country. We observe that good scores on HDI deters FDI, that higher FDI flows are associated with higher levels of carbon emissions in the case of emerging markets. Sustainability reporting attracts FDI to commodity exporting countries. The study provides possibilities for future research in a post-pandemic future.

scholarly journals An exploratory review of foreign direct investment and economic growth in four SSA countries

2013 ◽  
Vol 11 (1) ◽  
pp. 213-220
Author(s):  
Edmore Mahembe ◽  
Nicholas M. Odhiambo
Keyword(s):  
Economic Growth ◽  
Foreign Direct Investment ◽  
Direct Investment ◽  
Import Substitution ◽  
Developed Countries ◽  
Sub Saharan Africa ◽  
African Countries ◽  
Middle Income ◽  
Fdi Inflows ◽  
Sub Saharan

This paper highlights the status of foreign direct investment (FDI) and economic growth in four middle-income sub-Saharan Africa countries, namely: Angola, Mauritius, Namibia and Seychelles. The study examines the individual countries’ policies and strategies that were aimed at boosting FDI and economic growth. The study finds that the FDI inflows were fairly low during the period the 1980s and the 1990s. This is mainly because during this period, the policies of these countries, like many other sub-Saharan African countries, hinged mainly on import substitution, socialism and centralized economic systems. However, following the implementation of policies, such as privatisation, liberalisation, structural-adjustments, etc, in the 1990s and 2000s, the FDI inflows into these countries increased significantly, especially from developed countries. The biggest recipient of FDI inflows among the four studied countries, however, was Angola – where the FDI inflows increased from US$ 2145.5 mill in 2001 to US$ 16581.0 million in 2008.

Economic and legal instruments for the realization of foreign direct investment in infrastructure sectors of the economy

2020 ◽  
pp. 47-55
Author(s):  
Orshanska Marіana
Keyword(s):  
Foreign Direct Investment ◽  
Direct Investment ◽  
High Growth ◽  
Well Being ◽  
Gradual Improvement ◽  
Fdi Inflows ◽  
Investment Projects ◽  
Analysis And Synthesis ◽  
High Level ◽  
Fdi Attraction

The purpose of the article is to determine the nature, characteristics and keyproblems of the main types of economic and legal instruments for the realizationof foreign direct investment (FDI). the methodological basis of the study is asystematic approach to the processing and compilation of statistics and indicators,as well as methods for their comparison, analysis and synthesis and a method offorecasting decisions on the use of investment potential to increase the attractivenessand volume of FDI attraction. The scientific novelty of the research lies in theanalysis of greenfield and brownfield strategies as the main forms of FDIimplementation, the disclosure of the content and interpretation of data on thereal state of FDI attraction, the search for opportunities to improve the investmentclimate and effective mechanisms for attracting foreign investors. conclusions. Itis confirmed that the investment attractiveness and rating of the country in theinternational market are the main factors for attracting investors. Inaccessibleinfrastructure, inefficient judicial system, high level of corruption and imperfectlegislation are the main obstacles that need to be overcome in order to attractforeign investors’ funds, providing a full package of assistance and support ateach stage of the implementation of investment projects. Greenfield and brownfield(M&A) are the most effective forms of FDI in order to achieve high growth ratesof the domestic economy, improve the level of population well-being andinternationally enter Ukraine. An analysis of the statistics on the effectiveness ofinnovative enterprise development projects, the characteristics of economic andlegal instruments indicate the gradual improvement of the investment climate andthe promotion of FDI inflows into the region’s economy through the implementationof greenfield and brownfield strategies. Examples of effective implementation ofthese strategies in the creation of new enterprises, companies of foreignrepresentation, which are expanding their capacity and entering new domesticmarkets are given. Examples of the brownfield strategy have been analyzed torestart existing and high-quality structural and organizational changes in inefficiententerprises, which have given impetus to improving the economic environment,investment attractiveness of the economy of the region and the country as a whole.

ECONOMIC GROWTH ANALYSIS: A STUDY ON MALAYSIAN MARKET

2019 ◽  
Vol 8 (2) ◽  
Author(s):  
Suhaily Maizan Abdul Manaf ◽  
Shuhada Mohamed Hamidi ◽  
Nur Shafini Mohd Said ◽  
Siti Rapidah Omar Ali ◽  
Nur Dalila Adenan
Keyword(s):  
Economic Growth ◽  
Foreign Direct Investment ◽  
Direct Investment ◽  
Inflation Rate ◽  
Government Expenditure ◽  
Correlation Method ◽  
Research Direction ◽  
Least Square ◽  
Future Research ◽  
Internal And External Factors

Economic performance of a country is mostly determined by the growth and any other internal and external factors. In this study, researchers purposely focused on Malaysian market by examining the relationship between export, inflation rate, government expenditure and foreign direct investment towards economic growth in Malaysia by applying the yearly data of 47 years from 1970 to 2016 using descriptive statistics, regression model and correlation method analysis. By applying Ordinary Least Square (OLS) method, the result suggests that export, government expenditure and foreign direct investment are positively and significantly correlated with the economic growth. However, inflation rate has negative and insignificant relationship with the economic growth. The outcome of the study is suggested to be useful in providing the future research direction towards the economic growth in Malaysia. Keywords: economic growth; export; inflation rate; government expenditure

Attracting foreign capital as a factor in ensuring the country's economic growth

2020 ◽  
pp. 34-41
Author(s):  
Taras Malyshivskyi ◽  
Volodymyr Stefinin
Keyword(s):  
Economic Growth ◽  
Economic Development ◽  
Foreign Direct Investment ◽  
Low Income ◽  
Direct Investment ◽  
Foreign Capital ◽  
Local Level ◽  
Current Trend ◽  
Raw Material ◽  
Foreign Capital Inflows

The article examines the relationship between attracting foreign capital in the form of foreign direct investment and ensuring economic development. In particular, the analysis of the current structure of the economy is indicated, its raw material character is pointed out and, based on other researches, the necessity of its reform is substantiated, as Ukraine will remain a low-income country if the current trend continues. This is due to the fact that countries with a raw material structure of the economy are characterized by a low level of economic complexity, and therefore are not able to generate high levels of income in society. As a result, the expediency of stimulating the attraction of investment resources into the country’s economy, in particular in the form of foreign direct investment, is substantiated. The dynamics of attracting foreign direct investment to Ukraine and a number of other countries for the period from 1991 to 2019 is analyzed and the key negative factors that deter foreign investors from investing in the economy of Ukraine are indicated. As a result of the analysis, divergent trends in the economic development of Ukraine and other analyzed countries (Poland, Czech Republic, Slovakia, Turkey, Romania, Hungary) were identified, which contributed to economic stagnation and restrained economic growth and development. Taking into account the analysis, as well as based on the concept of investment and innovation growth, it is proposed to use the experience of Israel to improve the country’s investment attractiveness and stimulate foreign capital inflows by adapting the Yozma program to Ukrainian realities. According to our estimates, the adaptation of this program to the Ukrainian economy will attract about $ 350 million over a five-year period of venture capital alone. In addition, programs such as YOSMA can also be implemented at the regional or even local level. We believe that the use of this tool will improve the investment attractiveness of the country, as well as provide sufficient financial resources to modernize the domestic economy and ensure rapid economic growth.

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 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.

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.

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